merican  Bankers  Association 


ECONOMIC  SURVEY 


Third -Economic  Survey 
Reported  to  the  Executive  Council 
of  the  American  Bankers  Association 
at  White  Sulphur  Springs,  W.  Va.,  May  11,  1922 
by  the  Economic  Policy  Commission 
M.  A.  Traylor,  Chairman 


-530-m 

Jvn'35't. 

PREFACE 

The  Economic  Policy  Commission  of  the  American  Bfeu/ityef s  yAsso- 
ciation  undertook  to  make  a  survey  of  the  conditions  in  the  whole 
country  along  the  lines  laid  down  last  year  by  Mr.  John  S.  Dowm* 
then  President  of  the  Association.  The  Commission  sent  o Wt  irf  March 
about  1,500  questionnaires  to  members  and  a  few  others.  A  copy  of 
this  questionnaire  appears  below.  In  addition,  the  members  of  the 
Executive  Council  of  the  Association  and  the  secretaries  of  the  state 
associations  were  requested  to  send  questionnaires  to  such  other  men 
in  their  respective  states  as  might  be  able  to  furnish  information  of 
value. 

Of  the  1,500  questionnaires  sent  out,  738  answers  were  received 
in  time  to  be  used  for  the  compilation  of  the  report.  This  survey  will 
derive  its  chief  interest  from  the  fact  that  it  shows  more  or  less  correctly 
what  a  large  number  of  our  members  and  friends  believed  to  be  the 
economic  situation  of  the  country  on  and  about  April  1.  It  must, 
therefore,  be  remembered  that  the  resultant  picture  of  conditions  in 
this  country  may  not  be  an  accurate  presentation  of  the  momentary 
situation,  for  much  of  the  improvement  which  was  in  progress  at  the 
time  when  the  answers  were  received  has  continued  so  that  the  situation 
of  the  country  is  now  probably  better  than  it  was  on  April  1.  Those 
sufficiently  interested  to  peruse  the  summaries  of  the  answers  received 
from  each  state  and  compiled  by  the  Secretary  of  the  Commission  will 
gain  a  fairly  accurate  picture  of  the  consensus  of  opinion. 

A  few  general  and  striking  facts  gleaned  from  this  survey  were 
given  in  the  report  of  the  Economic  Policy  Commission  submitted  to 
the  meeting  of  the  Executive  Council  of  the  Association  at  White 
Sulphur  Springs  on  May  11,  1922. 

“It  is  evident  from  the  answers  received  to  the  questionnaire  that 
there  is  a  much  greater  feeling  of  hopefulness  in  the  country  than 
there  was  when  Mr.  Drum  made  his  last  survey.  Production  in  most 
lines  is  again  stimulated  and  sales  are  increasing,  so  that  manufacturers 
as  well  as  the  farmers  have  little  surplus  on  hand.  In  other  words, 
liquidation  has  been  completed  in  nearly  all  lines  of  activity  throughout 
the  country,  and  costs  have  decreased,  except  in  the  items  of  labor, 
transportation  and  taxation.  Even  as  regards  labor,  there  has 
undoubtedly  been  a  considerable  lowering  of  prices,  especially  as 
regards  agricultural  labor.  This  is  evidenced  by  the  fall  of  prices, 
both  wholesale  and  retail,  which  are  now  considerably  lower  than  they 
were  two  years  ago  and  in  some  instances  have  already  begun  to  recover 
slowly.  The  work  of  the  War  Finance  Corporation  has  undoubtedly 
been  of  great  assistance  to  many  parts  of  the  country,  though  this  fact 
seems  to  be  appreciated  by  only  a  limited  circle.  In  regard  to  the  rail¬ 
roads,  the  attitude  of  those  answering  is  an  entirely  reasonable  one. 


It  is  felt  that  freight  rates  are  too  high,  but  at  the  same  time  the  situation 
of  the  railroads  themselves  is  appreciated  to  an  extent  that  would  not 
have  seemed  possible  a  few  years  ago.  Much  as  everybody  wishes 
freight  rates  to  faevreduced,  it  is  realized  that  this  cannot  be  done  until 
th£  railroads  themselves  are  able  to  cut  down  their  operating  expenses 
sufficiently  to  earn  a  reasonable  return  upon  their  investment.  In  the 
answers  to  the  more  specifically  financial  sections  of  the  survey,  a 
curious  phenomenon  is  the  fact  that  there  is  apparently  little  interest 
in  the  whole  tariff  question.  When  it  is  considered  how  bitter  the 
contests  used  to  be  between  advocates  of  a  high  and  a  low  tariff,  it  is 
surprising  to  note  that,  while,  naturally,  each  section  of  the  country 
desires  that  that  be  done  which  will  favor  its  interests  most,  neverthe¬ 
less  the  general  sentiment  seems  to  be  that  the  whole  matter  is  not  one 
of  primary  importance.  It  may  be  that  in  some  respects  the  tariff 
question  is  almost  more  important  now  than  it  ever  was;  but  in  this 
estimate  of  what  the  economic  survey  means,  the  Commission  naturally 
is  presenting  not  its  own  views,  but  an  analysis  of  what  seems  to  be  the 
consensus  of  opinion  of  those  answering  the  questionnaire.  Everyone 
feels  that  the  worst  is  over,  that  interest  rates  will  continue  to  fall, 
that  business  failures  for  the  rest  of  the  year  will  not  be  unusually 
large.  There  is  little  spirit  of  pessimism  and  not  much  of  optimism,  but 
there  seems  to  be  a  determination  to  get  down  to  work  and  pull  the  cart 
out  of  the  mire.  It  is  realized  that  the  foreign  situation  leaves  much 
to  be  desired,  and  that  full  prosperity  cannot  return  to  us  until  Europe 
decides  to  forget  its  quarrels  and  get  down  to  business. 

“Personally  I  have  derived  at  least  this  great  consolation  from 
going  over  the  answers  to  these  questionnaires,  that  so  many  of  our 
members  have  come  to  realize,  as  Mr.  Drum  expressed  it  in  his  first 
survey  of  last  year,  that  it  is  ‘common  sense  and  a  knowledge  of  facts, 
coupled  with  clear  vision,  which  must  guide  the  conduct  of  every  one  of 
us  in  his  private  business  affairs.’  People  have  come  to  realize  that 
conditions  cannot  be  improved  by  simply  shouting  all  together,  ‘Good 
times  are  coming,’  but  it  is  also  felt  that  the  country  is  fundamentally 
so  sound  that  there  is  no  need  of  despairing  as  to  the  future.” 

In  conclusion,  I  wish  to  express  again  on  behalf  of  the  Economic 
Policy  Commission  the  deep  sense  of  gratitude  which  we  feel  toward 
all  those  who  took  the  trouble  to  fill  out  the  questionnaires  for  the 
Economic  Survey.  Everyone  who  has  ever  done  work  of  this  nature 
realizes  the  difficulties  of  the  task  and  how  much  thought  and  labor 
must  be  given  to  an  intelligent  summary  of  economic  conditions  in  one’s 
district.  The  work  both  last  year  and  this  could  not  have  been  done 
at  all  without  self-sacrificing  effort  on  the  part  of  the  members  and 
friends  of  the  Association,  as  well  as  the  members  of  this  Council 
and  the  secretaries  of  the  various  state  associations. 

May  15,  1922.  M.  A.  Traylor,  Chairman. 


Copy  of  Questionnaire 
American  Bankers  Association 

ECONOMIC  SURVEY,  APRIL,  1922 

The  following  questions  are  intended  to  apply  primarily  to  condi¬ 
tions  in  that  part  of  your  state  with  which  you  are  particularly  familiar. 
If  you  are  a  city  banker  having  little  contact  with  agricultural  condi¬ 
tions,  disregard  the  questions  bearing  on  these,  or  if  you  are  a  country 
banker  having  little  contact  with  industrial  and  general  commercial 
conditions,  ignore  the  questions  referring  to  them.  Please  designate 
the  part  of  your  state  that  your  answers  cover : 


INDUSTRIAL 

Note — Questions  in  this  group  are  intended  to  apply  to  manufac¬ 
turing  of  all  kinds  and  to  the  production  of  all  commodities  except 
natural  products. 

1.  What  are  the  principal  industries  of  your  part  of  the  state? 

2.  What  are  its  principal  manufactured  products  ?  Please  name  these 
products  in  the  order  of  their  importance. 

3.  How  do  the  quantities  in  which  they  are  being  produced  now  com¬ 
pare  with  quantities  produced  in  previous  periods,  say  last  year, 
two  years  ago,  and  1913? 

4.  Is  there  still  any  surplus  of  manufactured  goods,  over  and  above 
normal  supplies,  in  the  hands  of  manufacturers? 

5.  How  do  the  costs  of  production  in  manufacturing  compare  with 
the  costs  of  production  of  previous  periods,  say  last  year,  two 
years  ago,  and  1913? 

6.  Has  there  been  any  decrease  or  increase  in  the  cost  of : 

(a)  Labor  (d)  Money 

(b)  Materials  (e)  Taxation 

(c)  Transportation  (f)  Construction. 

7.  Has  there  been  any  change  in  the  wholesale  prices  of  manufac¬ 
tured  goods  produced  in  your  part  of  the  state  within  the  last  year 
or  within  the  last  two  years?  If  possible,  give  percentages. 


3 


8.  Has  there  been  any  change  in  the  retail  prices  in  your  part  of  the 
state  within  the  last  year  or  within  the  last  two  years?  If  possible, 
give  percentages. 


NATURAL  PRODUCTS 


Note — Questions  in  this  group  are  intended  to  apply  to  agri¬ 
culture,  mining,  lumber,  cattle  and  cattle  products,  sheep  and  wool — 
in  short,  all  except  manufactured  goods. 

9.  What  are  the  principal  natural  products  of  your  part  of  the  state? 
Please  name  these  products  in  the  order  of  their  impoftance. 

10.  How  do  the  quantities  in  which  they  are  being  produced  com¬ 
pare  with  the  quantities  of  previous  periods,  say  last  year,  two  years 
ago,  and  1913? 

11.  Is  there  a  surplus  of  natural  products  in  the  hands  of  producers? 
If  so,  what  kinds? 

12.  How  do  the  costs  of  production  compare  with  the  costs  of  pro¬ 
duction  of  previous  periods,  say  last  year,  two  years  ago,  and  1913? 

13.  Has  there  been  any  decrease  or  increase  in  the  cost  of : 


(a)  Labor 

(b)  Materials 

(c)  Transportation 


(d)  Money 

(e)  Taxation 

(f)  Construction. 


14.  Has  there  been  any  change  in  wholesale  prices  of  natural  prod¬ 
ucts  in  your  part  of  the  state  within  the  last  year  or  within  the 

last  two  years?  If  possible,  give  percentages. 

15.  Has  there  been  any  change  in  retail  prices  of  natural  products 
in  your  part  of  the  state  within  the  last  year  or  within  the  last 
two  years?  If  possible,  give  percentages. 

16.  Has  there  been  much  use  in  your  part  of  the  state  of  the 

facilities  placed  at  the  disposal  of  agriculturists  by  the  War 

Finance  Corporation?  If  so,  to  what  extent? 


RAILROADS 


17.  What  is  the  transportation  situation  in  your  state? 

18.  Is  it  felt  that  freight  rates  are  excessive,  and  if  so,  to  what 
extent? 


4 


19.  Are  there  any  proposals  in  regard  to  the  rehabilitation  of  the 
railroads  which  meet  with  general  approval  in  your  part  of  the 
state  ? 

20.  What,  in  general,  is  the  attitude  towards  railroads  in  your  part 
of  the  state  on  the  part  of 

(a)  Bankers 

(b)  Shippers 

(c)  General  Public. 

FINANCIAL 

21.  Is  sentiment  in  your  state  in  favor  of  or  opposed  to  the  Soldiers’ 
Bonus  Bill? 

22.  If  in  favor,  how  is  it  proposed  to  raise  the  sums  which  will  be 
needed  ? 

23.  Is  sentiment  in  your  state  in  favor  of  or  opposed  to  a  tariff, 
the  rates  of  which  are  to  be  based  on  the  principle  of  American 
Valuation? 

24.  Is  the  sentiment  in  favor  of  a  high  tariff  or  a  low  tariff? 

25.  Is  there  any  sentiment  in  your  state  favoring  a  constitutional 
amendment  to  eliminate  tax  exempt  securities? 

26.  Have  borrowers  any  difficulty  in  obtaining  credits  from  the  banks 
in  your  part  of  the  state? 

27.  Have  interest  rates  increased  or  decreased,  and  to  what  extent? 

28.  What  do  you  expect  the  course  of  interest  rates  to  be  for  the 
rest  of  1922? 

29.  Have  business  failures  in  your  part  of  the  state  been  increasing 
or  decreasing  of  late? 

30.  Is  it  expected  that  there  will  be  an  unusually  large  number  of 
failures  during  the  rest  of  this  year,  or  is  it  believed  that  busi¬ 
nesses  that  have  survived  so  far  are  now  in  satisfactory  shape? 

31.  What  is  the  prevailing  sentiment  in  your  part  of  the  state  regard¬ 
ing  the  so-called  budget  system  adopted  by  the  Federal 
Government? 


5 


32.  Is  it  believed  that  the  present  law  accomplishes  all  that  is  needed, 
or  is  it  believed  that  an  amendment  to  the  Federal  Constitution 
would  be  desirable  which  would  give  the  President  the  power 
to  submit  to  Congress  a  reasoned  and  balanced  budget  which 
Congress  would  approve  or  reject  as  a  whole,  somewhat  as  is 
done  under  the  European  parliamentary  form  of  government? 

33.  Have  you  any  other  suggestions  which  under  the  existing  law 
or  by  amendment  to  the  Constitution  would  make  possible  a  more 
efficient  financial  administration  on  the  part  of  the  Federal 
Government  ? 

GENERAL 

34.  Various  commodities,  both  raw  materials  and  manufactured  goods, 
have  responded  in  varying  degrees  to  the  readjustment  of  costs  and 
prices  that  has  been  in  progress  since  last  fall.  Cotton  and  copper, 
for  instance,  have  fallen  in  price  to  a  far  greater  extent  than 
most  kinds  of  manufactured  goods.  Ultimately,  of  course,  equi¬ 
librium  will  be  restored  and  prices  and  costs  harmonized  on  a  new 
level,  which,  of  course  will  not  necessarily  be  the  pre-war  basis. 
What  conditions,  in  your  opinion,  are  helping  to  bring  about  a 
speedy  readjustment  on  this  new  level? 

35.  What  conditions,  in  your  opinion,  are  holding  back  speedy 
readjustment? 

36.  Have  foreign  sales  of  raw  materials  and  manufactured  goods 

produced  in  your  part  of  the  state  decreased  or  increased  in  the 
last  year  ?  Why  ? 

37.  Have  they  decreased  or  increased  in  the  last  six  months? 

Why? 


REMARKS 


Name.  . 
Address 


Date 


6 


Summaries  of  Conditions  in  the 
Various  States 

ALABAMA 

According  to  the  reports  received,  the  situation  in  this  state  shows 
some  improvement  over  last  year,  both  in  production  and  general 
business  situation.  As  regards  the  former,  in  the  case  of  manufactured 
goods  the  best  observers  seem  to  believe  that  the  production  was 
about  10  per  cent,  better  than  last  year,  though  30  per  cent,  less  than 
two  years  ago  and  10  per  cent,  less  than  in  the  year  1913.  On  the 
other  hand,  surplus  stocks  have  been  gradually  diminishing  in  nearly  all 
lines,  and  while  taxation,  as  elsewhere,  is  higher,  other  costs  have 
come  down  so  that  a  fair  average  would  probably  show  that  the  cost 
of  production  is  5  per  cent,  less  than  last  year,  15  per  cent,  less  than 
two  years  ago,  while  it  is  40  per  cent,  greater  than  it  was  in  1913. 
This  reduction  in  cost  of  production  is  reflected  in  the  drop  of  prices, 
both  wholesale  and  retail,  though  different  observers  naturally  give 
very  different  estimates  as  to  details,  varying  anywhere  from  5  per  cent, 
to  60  per  cent.  Farm  production  of  all  kinds  has  been  recently 
increasing,  due  in  this  case  to  the  return  of  much  labor  which  during 
the  boom  period  had  drifted  away.  There  is  a  large  surplus  of  turpen¬ 
tine  and  rosin  on  hand,  but  only  a  little  cotton.  The  cost  of  production 
is  evidently  about  the  same  as  it  was  in  1913,  but  prices  have  fallen  to 
one-half  of  what  they  were  two  years  ago  and  are  probably  less  than 
they  were  in  1913.  There  has  been  very  little  use  made  of  the 
facilities  of  the  War  Finance  Corporation. 

The  railroad  situation  is  viewed  in  Alabama  with  considerable 
equanimity,  though  it  is  realized  that  freight  rates  are  at  least  25  per 
cent,  too  high.  The  sentiment  in  the  state,  at  least  among  the  banking 
and  general  business  interests,  is  opposed  to  the  Bonus  Bill.  The 
state  for  political  reasons  is  opposed  to  any  increase  in  tariff,  which, 
however,  is  contradicted  by  the  remarks  of  some  writers  who  state 
that  there  is  a  sentiment  in  favor  of  the  American  Valuation  Plan. 
Money  has  been  easy  and  it  is  generally  expected  that  interest  rates 
will  continue  to  decrease  unless  the  Bonus  Bill  should  become  law 
and  require  large  and  immediate  expenditures  of  capital.  There  is 
apparently  little  interest  even  in  banking  circles  in  such  questions 
as  relate  to  tax  exempt  securities  and  a  proper  budget  system  for 
the  Federal  Government.  Foreign  sales  have  been  somewhat  on  the 
increase  chiefly  due  to  larger  shipments  to  Cuba  and  South  American 
countries. 


7 


ARIZONA 


Arizona  is  not  a  manufacturing  state  and  everything  turns  upon 
copper,  cattle,  long  and  short  staple  cotton,  alfalfa  seed  and  hay.  The 
copper  situation  continues  to  be  bad.  There  are  only  about  two  com¬ 
panies  which  produced  anything  last  year,  though  one  mine  is  starting 
on  a  small  scale  and  some  small  smelter  improvements  and  enlarge¬ 
ments  have  been  undertaken.  1921  was  a  bad  year  for  cattlemen  and 
sheepmen,  the  ranges  being  dry  and  the  weather  cold.  There  is  a 
surplus  of  nearly  everything  which  is  produced  in  Arizona,  though 
the  percentages  given  vary  considerably.  While  it  is  costing  less  to 
produce  copper  this  year  than  it  did  in  1920  and  1921,  it  is  very  much 
higher  than  in  1913.  Copper  increased  in  price  8  per  cent,  since  last 
year,  but  is  20  per  cent,  less  than  two  years  ago.  Cattle  and  sheep  men 
are  paying  their  help  very  much  less,  one  observer  giving  the  decrease 
in  wages  as  being  as  much  as  66%  per  cent,  from  what  it  was  two 
years  ago.  The  price  for  cattle  has  increased  slightly  since  last  year 
but  is  perhaps  35  per  cent,  less  than  two  years  ago.  The  agriculturists 
proper  have  made  very  little  use  of  the  War  Finance  Corporation,  but 
some  cattle  loan  companies  have  obtained  money. 

It  is  felt  in  general  that  freight  rates  are  perhaps  40  per  cent,  too 
high,  but  on  the  whole  Arizona  is  not  complaining  of  its  railroad 
situation.  There  \s  opposition  to  the  Bonus  Bill  on  the  part  of 
the  larger  business  and  financial  interests,  but  some  observers  admit 
that  very  likely  if  there  were  to  be  a  general  vote  a  majority  would  be 
in  favor  of  the  present  Bonus  Bill.  Sentiment  seems  to  be  strongly 
in  favor  of  a  high  tariff,  and  there  is  some  belief  that  there  should  be  a 
constitutional  amendment  to  do  away  with  tax-exempt  securities, 
though  evidently  there  is  not  much  interest  in  the  question,  nor  in  the 
matter  of  a  Federal  budget.  All  observers  agree  that  money  is  tight 
and  that  interest  is  the  same  as  it  has  been  for  some  years  and  is  likely 
to  remain  so.  There  have  been  few  business  failures  and  not  many 
more  are  expected.  There  has  been  a  slight  increase  in  the  sale  of 
copper  to  foreign  countries  within  the  last  year. 

ARKANSAS 

The  production  of  lumber  and  related  industries  seems  to  have 
fallen  off  about  25  per  cent,  since  1913,  though  some  observers  place 
it  even  higher.  The  costs  of  production  are  about  half  of  what  they 
were  two  years  ago  and  about  the  same  as  in  1913,  the  reduction  being 
due  chiefly  to  decrease  in  the  cost  of  labor  and  material.  Both  whole¬ 
sale  and  retail  prices  seem  to  have  followed  suit,  though  to  what  extent 
is  a  matter  of  considerable  difference  of  opinion.  The  state  last  year 
had  the  smallest  acreage  of  cotton  in  many  years,  but  it  is  expected 


8 


that  more  will  be  planted  in  1922.  In  spite  of  this,  there  is  a  surplus 
of  cotton  on  hand,  as  also  of  corn,  which,  as  one  observer  says,  is  due  to 
the  fact  that  while  Europe  wants  it  she  cannot  pay  for  it.  The  produc¬ 
tion  costs  of  raw  materials  are  estimated  to  be  about  25  per  cent,  higher 
than  in  1913,  but  considerably  less  than  two  years  ago.  Apparently,  the 
only  use  made  of  the  facilities  of  the  War  Finance  Corporation  was  on 
the  part  of  a  few  cotton  farmers. 

It  is  generally  felt  that  railroad  rates  are  too  high,  and  labor  costs 
are  blamed  for  this.  There  is  much  opposition  to  the  Bonus  Bill  and  to 
a  high  tariff.  There  is  some  expression  in  favor  of  a  constitutional 
amendment  to  eliminate  tax-exempt  securities,  but  fundamentally  there 
is  little  interest  in  this  question,  and  even  less  in  the  question  of  a 
Federal  budget  system.  Interest  rates  have  come  down  about  2  per 
cent,  and  are  now  around  7  per  cent,  and  8  per  cent.,  but  it  is  not 
expected  that  they  will  go  much  lower.  In  fact,  country  banks  may 
charge  more.  There  have  been  few  failures.  Whether  these  will 
increase  depends  entirely  upon  the  crops. 

CALIFORNIA 

California  has  such  a  variety  of  industries  and  raw  products  that 
it  is  difficult  to  make  any  general  statements.  In  general,  however, 
there  has  been  an  increase  of  production  in  oil,  while  most  agricultural 
products  have  shown  a  decrease  over  two  years  ago  and  also  over 
1913.  Labor  costs  are  lower  than  they  were  two  years  ago,  but  higher 
than  in  1913.  Wholesale  and  retail  prices  have  followed  more  or  less 
the  general  trend.  There  has  been  some  use  of  the  facilities  of  the 
War  Finance  Corporation,  though  not  all  observers  make  note  of  this. 
In  some  parts  of  California  there  has  been  considerable  loss  due  to 
frost,  but  there  have  been  few  failures  and  it  is  not  expected  that  there 
will  be  many. 

The  railroad  situation  does  not  seem  to  affect  conditions  seriously 
in  California,  though  there  is  some  complaint  that  the  freight  rates 
for  shipment  of  fruit  to  eastern  points  are  too  high.  Labor  is  said  to  be 
unwilling  to  accept  lower  wages  and  this  is  believed  to  be  one  of  the 
causes  retarding  stabilization.  The  sentiment  in  regard  to  the  Soldiers’ 
Bonus  Bill  is  fairly  well  expressed  by  one  observer,  who  makes  the  fol¬ 
lowing  statement :  “The  American  Legion  and  their  close  friends  are, 
of  course,  in  favor  of  the  Bonus  Bill.  It  is  hard  to  obtain  any  informa¬ 
tion  as  to  the  sentiment  of  the  public  in  this  matter  owing  to  a 
reluctance  on  the  part  of  all  to  show  antagonism  to  the  American 
Legion,  but  we  do  know  that  there  is  some  very  strong  opposition.” 
Interest  rates  are  slightly  lower  than  they  have  been  and  the  banks 
have  been  ready  to  lend  money  for  legitimate  enterprises.  There 


9 


seems  to  be  some  real  sentiment  in  California  for  some  plan  to  eliminate 
tax-exempt  securities.  The  state  as  a  whole  favors  a  high  tariff  and 
American  valuation.  One  observer  makes  this  general  remark : 
“Prices  have  been  too  high  in  the  past.  Some  orchards  have  yielded 
as  much  as  $1,000  an  acre,  but  now  prices  are  nearly  back  to  normal, 
while  the  farmer  still  has  to  pay  high  prices  for  everything  he  buys.” 
Evidently  exports  to  the  Far  East  have  been  slightly  on  the  increase 
within  the  last  year. 

COLORADO 

In  Colorado  production  at  present  is  about  60  per  cent,  to  70  per 
cent,  of  two  years  ago,  but  more  than  1913,  this  being  brought  about 
by  the  fact  that  there  are  more  industries  producing.  Manufacturing 
in  Colorado  is  still  in  its  infancy,  having  started  about  twenty  years 
ago,  and  therefore  growing  yearly.  Stocks  on  hand  are  small  and 
in  the  last  eighteen  months  most  industries  have  been  working  on  a 
strict  order  basis.  Labor  in  general  is  lower  than  in  1919  and  1920, 
but  considerably  above  what  it  was  in  1913.  More  or  less  the  same 
is  true  of  materials.  Transportation  is  higher,  as  is  also  taxation.  In 
construction  there  has  been  a  decrease  in  most  lines,  though  labor  here 
also  shows  a  slight  increase.  In  general,  money  is  easier  and  it  is 
expected  that  rates  of  interest  will  continue  to  be  lower.  Retail  prices, 
it  is  said,  have  been  materially  reduced  within  the  last  year,  though 
they  are  still  above  what  they  were  in  1913.  In  regard  to  natural 
products,  it  is  estimated  that  these  are  40  per  cent,  larger  than  in  1913, 
but  about  20  per  cent,  less  than  last  year.  Many  farmers  cut  down 
their  operations  last  year  owing  to  the  financial  situation  and  endeav¬ 
ored  to  do  the  work  themselves.  A  decrease  in  acreage  was  caused  by 
smaller  acreage  on  older  farms,  though  in  some  places  considerable  new 
acreage  was  placed  under  cultivation.  There  is  still  a  considerable 
crop  of  wheat  and  potatoes  in  the  farmers’  hands,  though  the  wool 
crop  of  1920  and  1921  has  been  cleaned  up.  Production  costs  on  the 
farms,  for  the  reason  cited  above,  are  lower  than  they  have  been  in 
recent  years,  but  higher  than  in  1913.  The  wholesale  prices,  as  well  as 
the  retail  prices,  of  raw  products  show  considerable  decline.  The 
War  Finance  Corporation  has  been  largely  used  and  its  work  has  been 
regarded  as  very  beneficial. 

Freight  rates  are  considered  excessive,  and  the  general  complaint 
is  well  illustrated  by  one  observer,  who  cites  the  fact  that  freight  rates 
for  a  short  haul  of  twelve  miles  are  the  same  as  for  a  long  haul  of 
four  hundred  miles.  The  general  mass  of  people  are  said  to  be  in 
favor  of  the  Soldiers’  Bonus  Bill,  but  bankers,  business  men,  com¬ 
mercial  associations  and  the  like,  while  absolutely  solid  for  the  proper 


10 


care  of  disabled  and  crippled  soldiers,  do  not  wish  an  unlimited  bonus 
without  any  discrimination.  The  general  sentiment  is  in  favor  of  a 
high  tariff  with  American  valuation.  Failures  have  been  few,  and  it  is 
not  expected  that  the  percentage  this  year  will  be  above  the  average. 

One  observer  gives  the  following  interesting  quotation  as  to  the 
difficulties  experienced  by  business  from  too  much  interference  by  the 
government,  which  seems  to  be  regarded  as  one  of  the  causes  for 
the  retarding  of  business :  “  ‘A  little  broom-handle  factory  in  a  western 
state  was  visited  by  seventeen  state  and  federal  inspectors  inside  of 
three  months.  All  rode  in  motor  cars  paid  for  by  the  government,  and 
all  burned  gas  and  had  all  their  expenses  paid  by  the  government.’  So 
long  as  this  policy  remains  on  the  increase  just  so  long  will  we  be 
burdened  by  higher  taxes  and  less  prosperity.” 

CONNECTICUT 

Connecticut  is  largely  a  manufacturing  state,  its  big  money  crop 
being  tobacco.  In  manufacturing  the  quantities  turned  out  are  larger 
than  in  1921,  but  less  than  in  1920,  and  in  most  lines  less  than  in  1913. 
There  is  not  much  surplus  in  the  hands  of  the  manufacturers.  While 
costs  have  decreased  since  1920  and  1921,  they  are  not  back  to  the  1913 
level  as  yet.  Labor  costs  are  said  to  be  150  per  cent,  above  those  of 
1913,  materials  100  per  cent,  higher  and  prices  of  goods  are  said  to  be 
still  about  100  per  cent,  above  those  prevailing  in  1913.  There  is  little 
surplus  of  raw  materials  except  tobacco,  of  which  the  price  advanced 
very  decidedly  between  1913  and  1920,  but  most  of  the  1921  crop  is 
still  in  the  hands  of  the  farmers,  and  the  prices  are  so  low  that  they  are 
practically  ruinous  to  the  producers.  According  to  all  reports,  little 
use  has  been  made  of  the  facilities  of  the  War  Finance  Corporation. 
The  cost  of  production  of  raw  materials  is  about  20  per  cent,  lower 
than  two  years  ago,  but  much  higher  than  in  1913,  owing  to  the  in¬ 
creased  cost  of  labor  and  fertilizing  materials. 

Interest  rates  are  down  1  to  1J4  per  cent.,  and  little  change  is 
expected  in  1922.  Failures  have  increased  recently  and  more  are 
expected.  In  regard  to  tax-exempt  securities,  one  observer  writes : 
“This  question  has  had  much  consideration  in  this  section,  and  I 
believe  that  the  feeling  is  growing  that,  taking  everything  into  con¬ 
sideration,  it  would  be  better  if  the  states  and  municipalities  would 
eliminate  tax-exempt  securities.  Personally  I  believe  the  situation, 
both  as  to  federal,  state  and  municipal  affairs,  would  be  very  much 
improved  by  legislation  which  would  prevent  the  issuance  of  tax-exempt 
securities,  and  I  am  rather  inclined  to  believe  that  in  this  state  such 
legislation  may  be  brought  about  within  a  few  years.” 

In  regard  to  the  tariff,  the  same  writer  makes  the  following  state¬ 
ment  :  “As  the  state  of  Connecticut  is  nominally  Republican,  the  gen¬ 
ii 


eral  feeling,  in  my  judgment,  is  in  favor  of  a  tariff  which  will  protect 
our  manufacturing  interests,  but  which  will  not  go  to  such  an  extreme 
as  to  over-protect  them,  thereby  bringing  a  burden  upon  the  people 
purchasing  manufactured  products.  I  cannot  feel  that  the  tariff  ques¬ 
tion  can  be  approached  from  an  unselfish  point  of  view,  as  it  is  human 
nature  to  attempt  to  secure  the  best  possible  terms  for  one’s  own  inter¬ 
ests,  which  naturally  leads  the  manufacturer  to  incline  towards  a  very 
high  tariff  and  the  purchaser  to  an  unduly  low  tariff.  Again,  I  feel 
that  the  ideas  of  the  general  public  as  to  the  tariff  cut  very  little  figure. 
It  seems  to  be  a  political  matter  at  Washingon,  and  any  decision  is 
perhaps  subject  to  the  strongest  influence  that  may  be  brought  to  bear, 
regardless  of  the  actual  existing  conditions.”  The  railroad  situation,  in 
spite  of  increased  freight  rates,  does  not  seem  to  arouse  much  discon¬ 
tent.  In  general  it  is  felt  that  the  railroads  cannot  lower  rates  very 
much  until  their  operating  expenses  come  down  considerably. 

DELAWARE 

In  Delaware  there  is  very  little  surplus  of  any  kind  of  manu¬ 
factured  products  on  hand.  The  cost  of  production  is  said  to  be  less 
than  two  years  ago,  but  higher  than  1913.  Most  items  have  decreased, 
except  taxation  and  cost  of  transportation.  The  War  Finance  Cor¬ 
poration  has  been  very  little  used.  Business  interests  oppose  the  Sol¬ 
diers’  Bonus,  and  on  the  question  of  the  tariff  there  is  a  sharp  division 
between  manufacturers  and  other  interests.  In  regard  to  railroad  rates, 
one  observer  says:  “Not  high  enough  to  give  proper  revenue  to  the 
railoads,  but  too  high  to  allow  a  proper  resumption  of  business.”  The 
opinion  is  expressed  that  conditions  holding  back  speedy  adjustment 
are  “delay  in  proper  legislation  as  regards  adjustment  of  the  foreign 
debt  and  the  tariff  bills ;  lack  of  buying  ability  of  the  foreign  countries ; 
fear  of  increased  taxation  due  to  bonus  and  other  populistic  legislation 
pending  in  Washington.” 

In  regard  to  the  foreign  situation,  the  following  opinion  is  ex¬ 
pressed:  “There  has  been  possibly  a  slight,  very  slight,  increase  in 
foreign  sales  in  the  last  six  months.  Glazed  kid  was  one  of  our  chief 
exports,  but  there  is  very  little  now.  The  export  tax  on  hides  from 
India  is  one  of  the  chief  obstacles  outside  of  the  poor  buying  ability 
of  the  foreign  countries.” 

DISTRICT  OF  COLUMBIA 

There  is  little,  naturally,  to  be  said  about  conditions  in  the  District 
of  Columbia,  since  it  is  primarily  a  purely  residential  region  with  little 
industry  or  agriculture.  Freight  rates  are  considered  excessive.  In¬ 
terest  rates  have  come  down  and  failures  have  not  been  numerous  or 


12 


serious.  In  general,  business  in  the  District  of  Columbia  is  in  a  very 
healthy  condition.  The  building  industry  is  especially  active ;  all  of  the 
local  mechanics  of  the  building  trades  being  steadily  employed,  also  a 
great  many  mechanics  from  other  cities  who  have  been  attracted  here 
on  account  of  the  building  activity.  All  of  the  mechanics  in  the  building 
industry  are  still  receiving  wartime  wages.  The  wages  of  the  common 
laborers  have  been  reduced  about  25  per  cent. 

FLORIDA 

Most  of  the  industries  in  Florida  seem  to  have  been  hard  hit  by 
the  general  depression,  except  in  the  case  of  the  citrus  fruits  which 
show  good  returns  owing  to  the  frost  in  California.  A  very  large 
surplus  of  phosphate  is  still  on  hand,  as  this  business,  it  is  said, 
“cannot  revive  until  foreign  exchange  rates  materially  improve.” 
In  other  lines,  such  as  lumber,  naval  stores,  and  cigars,  it  is  said 
that  the  surplus  is  not  large  because  the  producers  were  compelled 
to  liquidate  even  though  at  a  great  sacrifice.  There  evidently  is  con¬ 
siderable  feeling  against  the  railroads,  especially  in  the  western  part 
of  the  state.  The  facilities  of  the  War  Finance  Corporation  have 
not  been  used  to  any  extent.  Interest  rates  are  around  8  per  cent, 
and  10  per  cent.,  though  the  tendency  is  toward  lower  rates.  Failures 
have  been  somewhat  on  the  increase.  In  regard  to  the  Bonus  Bill, 
one  observer  states  that  not  even  the  soldiers  are  enthusiastic  about 
its  provisions  and  all  other  interests  are  opposed.  A  writer  from 
Western  Florida  states  that  his  section  of  the  country  is  prostrate, 
though  his  view  is  that  south  Florida  has  as  yet  been  untouched  by 
the  depression. 

GEORGIA 

The  production  of  manufactured  goods  has  increased  except  along 
those  lines  dependent  upon  cotton  seed  oil.  It  is  said  that  costs  of 
production  are  less  than  they  were  a  year  ago  or  two  years  ago  and 
about  the  same  as  in  1913.  Both  wholesale  and  retail  prices  have 
followed  the  same  trend.  As  regards  raw  products,  there  has  been 
considerable  diversification  lately  so  that  outside  of  cotton,  agricul¬ 
tural  products  show  an  increase  of  15  per  cent,  over  1920,  30  per  cent, 
over  1919,  and  50  per  cent,  over  1913.  Cotton,  on  the  other  hand, 
shows  a  corresponding  decrease,  which  may  mean  a  considerable 
reduction  in  acreage  since  1913.  Cost  of  production  has  increased, 
which  is  said  to  be  due  to  low  yields  because  of  boll  weevil.  In  general, 
prices  of  raw  products  have  decreased,  though  lately  there  has  been 
an  increase  in  the  price  of  cotton.  The  facilities  of  the  War  Finance 
Corporation  have  been  used  somewhat,  especially  as  outside  of  the 


13 


larger  centers  there  is  still  more  or  less  credit  stringency,  and  liquida¬ 
tion  is  continuing. 

In  regard  to  the  railroads:  “The  general  view  throughout  the 
state  is  that  rates  are  excessive  and  have  a  blighting  effect  upon 
the  producers,  who  find  themselves  separated  from  markets  by  trans¬ 
portation  costs.  Short  lines  are  in  distress,  with  but  few  exceptions, 
having  but  little  business.  The  public,  however,  continues  sympathetic 
toward  carriers,  although  the  demand  for  lower  rates  is  steadily 
growing.  The  railroads  are  reporting  that  they  spend  a  dollar  to 
produce  revenue  of  ninety-seven  cents.  A  state  bond  issue  has  been 
suggested  recently  for  the  purchase  outright  of  certain  important 
lines  in  distress.  A  mass  meeting  of  citizens  has  been  recently 
suggested  to  consider  the  welfare  of  short  lines.  No  definite  movement 
under  way  to  rehabilitate.” 


IDAHO 

Idaho  has  practically  no  manufacturing  industries  and  the  reports 
received  covered  only  the  agricultural  sections  of  the  state.  In 
these  there  were  little  surplus  stocks,  cattle  being  scarce.  It  is  said 
that  in  general  costs  were  about  20  per  cent,  less  than  last  year,  40 
per  cent,  less  than  two  years  ago,  but  15  per  cent,  more  than  1913. 
From  the  west  central  part  of  the  state  a  report  is  made  to  the 
effect  that  “Farm  labor  is  now  about  the  same  as  1913.  About  $35 
to  $55  per  month  per  hand  with  keep.  This  is  nearly  50  per  cent, 
less  than  two  years  ago.”  Lower  costs  have  also  been  brought  about 
by  the  fact  that  the  farmers  are  doing  their  own  work.  Wholesale 
and  retail  prices  are  both  lower  than  they  were  a  year  ago  and  two 
years  ago.  Regarding  the  War  Finance  Corporation,  there  seems  to 
be  some  complaint  in  that  it  is  stated  that  the  only  class  that  has 
received  any  assistance  has  been  that  of  the  large  live  stock  growers. 
From  southeastern  Idaho  there  is  this  complaint:  “They  (The  War 
Finance  Corporation)  have  refused  to  accept  any  small  loans  of  less 
than  $2,000.00.  This  has  eliminated  all  small  farmers  that  have  not  a 
large  amount  of  live  stock,  enough  to  secure  a  loan  of  $2,000.00  or 
more.  It  seems  as  though  the  War  Finance  Corporation  is  only 
assisting  the  larger  borrowers  that  are  in  the  live  stock  business,  sheep 
and  cattle.” 

In  regard  to  American  Valuation,  one  observer  states,  “Very 
few  here  understand  the  principle  of  American  valuation.”  In  regard 
to  the  railway  situation,  there  is  much  complaint  that  the  rates  are 
too  high  and  at  least  in  some  parts  of  the  state  the  service  is 
inadequate,  as  witnessed  by  one  observer  who  says,  “It  takes  three 
days’  time  to  go  to  our  county  seat,  thirteen  miles  distant,  and  have 
any  time  there.”  Interest  rates  in  general  have  remained  about  the 


14 


same.  The  Bonus  Bill  is  said  to  be  opposed  except  by  ex-soldiers  and 
their  personal  friends. 

From  the  southwestern  part  has  come  the  following  general 
summary :  “Conditions  here  are  excellent.  Fruit  crop  was  good,  while 
wheat  was  sold  at  less  than  cost  of  production.  Cattle  held  over 
are  now  selling  at  eight  cents,  which  was  a  war  time  price.  Hogs 
are  now  back  to  war  prices  and  a  large  acreage  of  lettuce  will  bring 
in  a  large  sum  from  the  eastern  markets.  However,  the  profits  must 
be  made  solely  on  minimum  production  costs.” 

ILLINOIS 

In  Illinois,  as  in  the  other  states  with  very  diversified  industries, 
it  is  difficult  to  summarize  conditions.  In  general,  production  costs 
are  undoubtedly  lower  than  a  year  ago  and  considerably  lower  than 
two  years  ago,  though  still  somewhat  above  those  for  1913.  In  the 
manufacturing  industries,  cost  of  labor  is  perhaps  one-third  lower  than 
last  year  except  in  the  building  trade,  where  there  has  been  compara¬ 
tively  little  reduction.  Money  is  undoubtedly  cheaper,  but  taxation 
has  increased  considerably.  Wholesale  prices  are  perhaps  20  per  cent, 
less  than  last  year  and  retail  prices  have  also  come  down  somewhat. 
From  the  western  part  of  the  state  the  following  information  is  given: 
“There  is  a  large  surplus  of  manufactured  agricultural  implements  in 
the  hands  of  manufacturers.  This  is  much  above  normal  supply. 
There  is  considerable  surplus  in  the  hands  of  all  other  manufacturers 
in  this  part  of  the  state.  Because  of  a  desire  to  keep  their  employees 
busy  many  manufacturing  plants  have  operated  on  stock  to  a  much 
greater  extent  than  they  would  normally  do.”  The  surplus  in  the  agri¬ 
cultural  implement  industry  is  due  to  the  depression  existing  in  the 
farming  communities.  Much  of  the  surplus  of  crops  has  now  been 
marketed,  but  often  at  prices  which  did  not  bring  the  farmer  any 
profit.  Acreage,  however,  is  pretty  normal,  and  hogs  and  cattle  have 
increased  in  number.  The  farmers  and  their  families  have  been  doing 
much  of  the  work  themselves.  This  has  aided  in  reducing  costs.  In 
the  southern  part  of  the  state,  and  in  those  other  parts  where  coal  is 
mined,  the  reports  indicate  that  wages  of  miners  have  not  decreased, 
and  at  the  time  of  writing  this  report  a  strike  has  interrupted  the  whole 
industry  of  coal  mining.  There  has  been  practically  no  change  in  either 
the  wholesale  or  retail  price  of  coal  within  the  last  two  years.  Whole¬ 
sale  prices  of  farm  products  are  very  much  reduced  from  what  they 
were  two  years  ago  and  retail  prices  have  come  down  somewhat,  though 
not  in  the  same  proportion  as  wholesale  prices.  There  was  consid¬ 
erable  use  made  of  the  facilities  provided  by  the  War  Finance  Cor¬ 
poration. 

There  is  much  complaint  about  the  railroad  situation,  though  in 


15 


many  quarters  it  is  felt  that  the  railroads  themselves  can  do  nothing 
until  the  Labor  Board  permits  wages  to  be  reduced,  thereby  permit¬ 
ting  a  reduction  in  operating-  expenses.  As  regards  the  Bonus  Bill, 
undoubtedly  a  majority  of  the  people  in  the  state  are  for  it,  though 
among  more  intelligent  business  men  and  among  financial  interests  in 
general  there  is  much  opposition  to  a  cash  bonus.  In  Chicago  and 
some  of  the  other  larger  centers  of  the  state  there  is  a  very  decided 
sentiment  that  tax-exempt  securities  should  be  eliminated.  In  regard 
to  the  tariff,  the  general  sentiment  is  in  favor  of  a  high  tariff,  but  in 
regard  to  American  valuation  sentiment  is  divided,  the  large  importers 
being  very  much  opposed,  while  some  of  the  manufacturers  favor  it. 
In  general  money  has  become  much  easier  all  over  the  state  and  banks 
have  had  no  difficulty  in  finding  means  to  finance  legitimate  enterprises 
in  the  cities.  In  some  of  the  rural  districts  banks  still  have  a  consid¬ 
erable  amount  of  frozen  credits  on  hand.  In  the  larger  centers  it  is 
expected  that  interest  rates  will  continue  to  decrease  slightly  during 
the  rest  of  the  year.  While  business  failures  have  increased  somewhat 
in  the  last  year,  it  is  felt  that  the  worst  is  over  and  that  those  concerns 
which  have  lasted  until  now  are  likely  to  weather  the  storm.  From  the 
north  central  part  of  the  state  a  report  was  received  which  applies 
probably  to  most  of  the  manufacturing  industries  throughout  the  state : 
“Exchange  conditions  interrupted  foreign  trade  with  some  of  our  local 
factories  some  two  or  three  years  ago  and  since  that  time  it  has  not 
been  resumed.” 

INDIANA 

In  Indiana  there  is  much  diversification  and  it  is  difficult  to  make 
statements  bearing  upon  all  parts  of  the  state.  As  regards  the  steel 
industry  in  the  northwestern  part  of  the  state,  it  is  said  that  the  pro¬ 
duction  is  about  75  per  cent,  of  1920,  but  equal  to  that  of  1913.  In 
regard  to  other  manufactured  products  in  other  parts  of  the  state,  the 
statement  is  made  that  the  production  is  about  50  per  cent,  greater 
than  last  year,  but  25  per  cent,  less  than  two  years  ago.  Costs  in 
general  seem  to  be  still  above  those  of  1913,  though  they  have  decreased 
somewhat  in  the  last  years.  Wholesale  prices  seem  to  be  down  25  per 
cent,  to  40  per  cent.,  while  retail  prices  are  reduced  about  15  per  cent, 
to  25  per  cent.  From  western  Indiana  it  is  reported  that  the  corn  crop 
was  much  larger  than  any  previous  year  and  there  are  probably  a  larger 
number  of  breeding  hogs  than  have  ever  been  held  before.  Cattle  on 
the  other  hand  is  not  as  numerous  as  in  previous  years.  Farmers 
figure  that  they  are  making  a  good  profit  on  finished  hogs  at  $10. 
Farms  are  being  taxed  very  heavily.  Labor  costs  are  somewhat  lower. 
There  is  a  general  trend  toward  lower  prices,  but  rural  districts  are 
slow  in  taking  losses.  There  has  been  some  use  of  the  facilities  of 
the  War  Finance  Corporation. 


16 


There  are  very  few  expressions  of  opinion  regarding  the  railroads 
except  one  from  the  central  part  of  the  state,  in  which  the  following 
remark  appears :  “This  is  a  railroad  town.  They  are  all  drawing 
large  wages,  that  is,  those  that  are  working,  about  33l/s  per  cent,  being 
furloughed.  They  do  not  know  the  true  condition  of  the  railroads  and 
have  a  foolish  idea  that  rates  can  be  reduced  and  wages  maintained.” 
In  regard  to  the  Bonus  Bill,  the  sentiment  is  probably  well  expressed 
by  one  observer  as  “quietly  opposed.”  According  to  at  least  one  state¬ 
ment,  the  feeling  is  becoming  quite  general  that  tax-exempt  securities 
should  be  eliminated.  “Tax-exempt  securities  are  a  very  serious 
menace  to  the  progress  and  development  of  our  country.  Everyone  in 
this  locality  that  can  sell  his  plant,  his  business  or  any  of  his  assets  is 
converting  them  into  tax-exempt  securities.  They  feel  the  burden  has 
become  too  great.”  Money  rates  are  easier.  Failures  have  been  in¬ 
creasing  in  number. 

IOWA 

In  Iowa  manufacturers  report  generally  that  1920  was  the  peak, 
while  1921  was  very  hard  on  all  industries  and  they  found  it  very 
difficult  to  make  any  profit.  There  has  been  a  general  tendency  to 
shut  down,  with  consequent  unemployment.  In  ;regard  to  agri¬ 
culture,  the  chief  industry  of  the  state,  it  is  said  that  the  production  of 
grains  is  about  the  same  as  in  1913,  about  90  per  cent,  of  1920,  and 
about  the  same  as  in  1921.  Cattle,  on  the  other  hand,  has  been 
reduced  about  25  per  cent.  Hogs  are  on  the-  increase,  and  heavy 
spring  crops  are  expected  in  1922,  according  to  a  statement  from 
northwestern  Iowa.  There  is  no  surplus  except  corn  in  cribs,  amount¬ 
ing  to  about  20  per  cent,  of  the  annual  crop  and  oats  amounting  to 
about  10  per  cent,  of  the  annual  crop.  “Cost  of  production  will 
probably  be  10  per  cent,  less  than  last  year,  and  30  per  cent,  less  than 
two  years  ago.  It  will  probably  be  30  to  40  per  cent,  over  the  1913  cost, 
due  to  increased  cost  of  labor,  farm  machinery,  taxes,  and  trans¬ 
portation.” 

The  facilities  of  the  War  Finance  Corporation  were  used  very 
extensively.  From  western  Iowa  it  is  reported  that  the  banks  are 
charging  8  per  cent,  on  ordinary  counter  loans.  Six  per  cent,  plus 
21/2  per  cent,  commission  is  charged  on  loans  on  farms,  provided 
the  land  is  choice  property  and  the  amount  asked  is  not  more  than 
$75  an  acre.  It  is  expected  that  these  rates  will  decrease  during 
the  year.  From  northeastern  Iowa  the  following  report  is  made: 
“We  anticipate  before  1922  is  over  that  farm  mortgage  loans  will 
be  obtainable  at  5y2  per  cent,  and  possibly  less.  Little,  if  any,  reduc¬ 
tion  has  been  made  on  ordinary  commercial  loans  to  local  borrowers 
below  the  regular  8  per  cent,  rate,  because  many  of  the  banks  are 

17 


still  borrowing  and  all  are  trying  to  bring  themselves  into  a  stronger 
financial  position.”  According  to  all  reports,  there  is  a  very  strong  1 
sentiment  in  favor  of  the  Bonus  Bill  in  Iowa. 

KANSAS 

Kansas  shows  very  little  surplus  of  any  kind.  The  cost  of  produc¬ 
tion  is  probably  25  per  cent,  less  than  it  was  at  its  peak  but  still 
considerably  above  what  it  was  in  1913.  From  the  southwestern 
part  of  the  state  the  following  report  is  received:  “There  is  the 
poorest  prospect  in  twenty  years  in  the  wheat  crop.  The  wheat  crop 
last  year  was  fair  but  returned  a  loss  to  raisers.  Coarse  grains 
are  abundant,  but  the  cost  of  gathering  and  threshing  exceeded  what 
could  be  realized  on  the  sale  of  the  grain,  with  the  result  that  little 
was  gathered,  most  of  it  remaining  in  the  fields  for  feed  for  hogs 
and  live  stock.  In  contrast  to  the  low  price,  or  even  unmarketability 
of  grain,  hogs  returned  some  profit,  but  the  supply  in  this  section  was 
not  more  than  15  per  cent,  or  20  per  cent,  of  normal,  so  that  little 
advantage  resulted.  The  cattle  supply  has  been  much  depleted,  and 
raisers  are  still  losing  money  on  production  costs.  Good  horses 
still  sell  at  public  sales  at  from  $15  to  $50  per  head.  All  products 
of  the  farms  that  can  be  sold  have  been  disposed  of,  and  there  is 
no  surplus  in  the  hands  of  90  per  cent,  of  the  farmers.  Everything 
they  own  in  the  way  of  live  stock,  equipment,  etc.,  is  mortgaged  for 
more  than  it  would  sell  for  under  present  conditions,  and  the  farmer’s 
buying  power  is  limited  to  what  little  he  can  get  from  the  sale  of 
poultry  and  dairy  products.  Ground  and  seasonal  conditions  are  con¬ 
sidered  good  for  the  planting  of  spring  crops,  but  acreage  will  be  lim¬ 
ited  on  account  of  the  inability  of  farmers  to  finance  operations.” 
Wholesale  and  retail  prices  are  probably  25  per  cent,  less  than  they 
were  two  years  ago.  The  facilities  of  the  War  Finance  Corporation 
have  been  used  in  a  varying  degree  in  different  parts  of  the  state. 

The  feeling  in  regard  to  the  Bonus  Bill  is  very  much  divided, 
but  there  seems  to  be  considerable  sentiment  in  favor  of  getting  rid 
of  tax-exempt  securities.  An  observer  from  the  northwestern  part 
of  the  state  reports  as  follows :  “Strong  sentiment  favors  a  constitu¬ 
tional  amendment  to  eliminate  tax-exempt  securities.  This,  however, 
would  meet  opposition  from  the  agricultural  classes,  in  so  far  as  it 
relates  to  bonds  of  federal  and  joint  stock  land  banks,  which,  like 
the  tariff,  is  another  evidence  of  the  selfishness  of  human  beings 
generally.” 

The  rate  of  interest  seems  to  be  about  8  per  cent.,  the  same  as  it 
has  been  during  recent  years,  and  not  much  reduction  is  expected.  In 
the  coal  region  it  is  reported  that  except  for  the  strike  the  price  of  coal 
has  declined.  Sentiment  in  regard  to  the  tariff  finds  expression  in 


18 


the  following  statement:  “We  cannot  afford  to  build  a  wall  around 
the  United  States  if  we  expect  to  retain  our  present  position  in 
the  world  financially.”  Banks  generally  are  taking  care  off  the 
legitimate  and  pressing  needs  of  customers. 

As  regards  the  railroads,  the  following  sentiment  seems  to  be 
general  throughout  the  state:  “During  1921  the  cost  of  transporting  a 
car  of  cattle  to  market  has  been  as  much  as  10  to  15  per  cent,  of  its 
gross  value ;  as  much  as  50  per  cent,  of  the  gross  value  for  transporting 
a  car  of  wheat  to  the  seaboard ;  and  on  other  commodities  the  cost 
of  the  freight  is  in  proportion,  often  exceeding  the  cost  of  the  com¬ 
modity  at  point  of  origin.  Cases  have  been  known  where  sheep  or 
cattle  which  had  to  be  transported  for  long  distances  sold  for  less 
at  market  than  the  amount  of  the  freight  charges,  and  drafts  were 
drawn  back  against  the  shipper  for  the  deficit.” 

KENTUCKY 

In  Kentucky  manufacturing  is  of  secondary  importance.  “The 
northeast  section  has  iron  and  steel  works  of  considerable  importance. 
Louisville  has  a  good  -  deal  of  manufacturing  of  diversified  kinds, 
of  which  tobacco  is  most  important,  agricultural  implements  next, 
and  then  cotton  and  woolen  products.  The  towns  located  on  the 
Ohio  River  have  a  number  of  manufacturing  plants  of  considerable 
importance.  The  products  manufactured  vary  greatly,  textiles  occu¬ 
pying  first  position.”  As  regards  raw  products,  the  costs  of  pro¬ 
duction  are  perhaps  10  per  cent,  less  than  last  year,  30  per  cent,  less 
than  two  years  ago,  but  double  what  they  were  in  1913.  There  is 
a  surplus  of  corn  still  on  hand,  but  tobacco  stocks  have  declined. 
From  the  central  part  of  the  state  comes  the  following  report :  “There 
was  a  decided  increase  in  wholesale  price  in  our  principal  crop 
(tobacco)  in  1919,  a  decrease  in  1920  and  a  slight  increase  in  1921. 
Hogs,  cattle,  wheat,  and  lambs  all  sold  at  a  decrease  in  1921,  compared 
with  the  previous  year,  but  all  show  improvement  over  the  past 
several  months.”  From  the  extreme  northwest  of  the  state  the 
report  in  regard  to  coal  is  that  the  average  price  at  mine  is  now 
$1.35,  in  1921  it  was  $1.25,  while  in  1920  it  was  $6. 

The  sentiment  in  regard  to  the  bonus  and  the  tariff  is  very 
much  divided.  In  regard  to  the  railroads  the  statement  is  made  that 
while  rates  should  come  down  it  is  not  expected  that  they  will  be 
lowered  without  a  lowering  of  railroad  wages  to  compensate.  The 
statement  is  made  in  regard  to  the  War  Finance  Corporation  that 
it  placed  “ten  million  dollars  at  the  disposal  of  our  tobacco  farmers 
through  their  Burley  Cooperative  Marketing  Association.  Happily, 
it  was  not  necessary  to  utilize  any  part  of  the  same,  as  they  financed 
themselves  through  the  assistance  of  local  bankers  over  the  state, 


19 


which  loans  were  all  repaid  in  less  than  60  days  from  sales  effected 
for  cash.” 

LOUISIANA 

1  he  principal  industries  of  the  state,  ranked  according-  to  the 
value  of  their  products,  are  as  follows :  Sugar,  lumber,  petroleum, 
cottonseed  oil  and  cake,  rice  cleaning  and  polishing,  food  prepara¬ 
tions,  ba£s,  bakery  products,  shipbuilding,  foundry  and  machine  shops, 
railroad  shops,  cigars  and  cigarettes,  coffee  roasting  and  grinding, 
naval  stores.  Louisiana  had  115  establishments,  the  value  of  the 
annual  output  of  which  exceeded  $1,000,000.  In  regard  to  sugar 
there  were  578,000,000  pounds  produced  in  1913;  253,000,000  pounds 
in  1919;  and  534,000,000  pounds  in  1921.  Of  cotton  the  production 
consisted  of  14,093  bales  in  1913;  12,424  bales  in  1919;  and  f  13,750 
bales  in  1921.  The  costs  of  production  were  lower  than  two  years 
ago,  but  not  quite  as  low  as  1913.  Labor  on  farms  and  plantations 
went  down  to  1913  prices,  but  foodstuffs  and  implements  were  still 
quite  high  as  compared  with  1913.  Wholesale  and  retail  prices  showed 
a  reduction  of  about  25  per  cent,  from  the  peak.  Cotton  came  down 
from  30  to  16  cents  a  pound;  sugar  from  17  to  5  cents  a  pound;  and 
rice  from  $10  a  bag  to  $4.  The  only  substantial  surplus  of  materials 
is  in  the  case  of  cotton  and  lumber.  The  War  Finance  Corporation 
lent  about  $1,000,000  in  the  state. 

Freight  rates  are  high,  “but  the  complaint  is  not  against  the  rail¬ 
roads,  as  it  is  realized  that  the  rates  must  exist  to  meet  the  expenses 
of  the  railroads.  The  complaint  is  against  labor  boards  which  subject 
these  roads  to  labor  conditions  which  are  extravagant,  uneconomic 
and  ruinous.”  There  is  considerable  opposition  to  the  bonus,  but  if 
it  is  to  pass  the  sales  tax  is  favored.  The  questionnaire  sent  out  to 
the  banks  showed  that  90  per  cent,  were  in  favor  of  a  high  tariff 
based  on  American  valuation.  In  regard  to  tax-exempt  securities  the 
following  statement  is  made :  “As  a  constitutional  question,  the  state  is 
opposed  to  yielding  this  taxing  power  to  the  Federal  Government. 
As  an  economic  question,  the  abuse  of  the  issue  of  tax-free  securities 
is  realized.  Some  middle  course  should  be  possible.”  Interest  rates  in 
general  have  decreased  from  8  to  6  per  cent.,  and  it  is  expected  that 
they  will  continue  to  decrease.  There  were  a  number  of  failures,  but 
these  have  been  decreasing,  and  it  is  not  expected  that  there  will  be 
an  unusual  number  in  the  near  future.  In  general  exports  have  de¬ 
creased,  except  cotton  exports,  which  have  increased  within  the  last 
year. 

♦  MAINE 

Production  in  Maine  of  manufactured  goods  is  less  than  in  1913 
and  much  less  than  two  years  ago.  There  is  a  surplus  of  pulp  and  cot¬ 
ton  goods.  Wholesale  prices  have  come  down  and  costs  of  production 

20 


also.  There  has  been  a  considerable  increase  in  the  production  of  apples 
and  some  increase  in  potatoes.  Of  the  latter  there  is  still  a  consid¬ 
erable  stock  on  hand,  and  in  most  of  these  cases  prices  have  been  satis¬ 
factory.  A  protective  tariff  is  generally  desired.  Maine  is  said  to 
have  come  through  better  than  most  states  and  is  said  to  have  a  hopeful 
outlook. 

MARYLAND 

In  Maryland  the  output  of  manufactures  has  declined  in  1920, 
varying  in  different  lines  from  10  to  50  per  cent.  Clothing,  phosphates, 
acids  and  canning  are  notably  depressed.  In  general,  there  are  no 
stocks  on  hand  and,  in  fact,  the  opinion  is  expressed  that  they  would 
not  supply  a  normal  demand.  Costs  of  production  are  generally  lower, 
except  that  taxation  has  increased,  the  general  reduction  being  about 
10  per  cent,  in  labor,  20  to  50  per  cent,  in  material  costs  and  10  to  15 
per  cent,  in  construction  costs.  The  wholesale  prices  of  nearly  all 
standard  lines  of  manufactured  goods,  while  very  irregular,  have 
declined  anywhere  from  25  to  50  per  cent,  from  peak.  Retail  prices 
have  not  kept  pace  to  the  same  extent,  though  they  are  also  on  the 
decline.  In  regard  to  agricultural  products  there  is  no  appreciable 
difference  in  quantities,  but  a  very  great  slump  in  values.  Most  of  the 
agricultural  products  have  come  on  the  market  due  to  the  farmers’ 
pressing  need  for  cash.  Costs  were  slightly  below  those  of  1920,  but 
still  considerably  above  those  of  1913.  According  to  opinions  expressed, 
there  has  been  little  use  of  the  facilities  of  the  War  Finance  Corporation. 

In  regard  to  the  railroads,  it  is  generally  recognized  that  “wages 
must  be  reduced,  and  even  more  important  than  that,  the  union  rules 
so  adjusted  as  to  produce  effective  labor  during  the  time  paid  for.” 
The  opinion  is  generally  expressed  that  there  is  strong  opposition  to  the 
Soldiers’  Bonus  Bill,  regardless  of  the  method  used  for  raising  the 
same.  There  is  “no  crystallized  sentiment  in  regard  to  the  evil  of  the 
tax-exempt  securities.”  Interest  rates  have  remained  steady  at  6  per 
cent.,  and  if  there  is  any  change  it  will  be  toward  a  decrease.  It  is  said 
that  the  conditions  holding  back  speedy  adjustment  are  exports  and 
imports,  which  must  be  restored  before  normal  conditions  can  return, 
and  heavy  taxes,  probably  unavoidable,  are  also  a  large  factor.  The 
last  six  months,  however,  have  shown  a  steady  increase  in  exports, 
which  is  believed  to  be  due  to  some  improvement  in  the  foreign  situa¬ 
tion. 

MASSACHUSETTS 

Massachusetts  is  almost  wholly  industrial,  her  farm  products  con¬ 
sisting  merely  of  dairy  and  fruit  products  and  some  lumber,  so  that  the 
sharp  reductions  in  prices  from  which  agricultural  states  have  suffered 
have  not  had  much  effect  on  Massachusetts.  As  regards  her  manu- 


21 


facturecl  products,  however,  there  has  been  considerable  slump  from 
two  years  ago.  In  the  boot  and  shoe  industry  the  level  of  production 
is  about  the  same  as  in  1913,  but  probably  25  per  cent,  less  than  when  it 
Mjas  at  the  peak.  In  cotton  the  present  production  represents  perhaps 
80  per  cent,  of  the  peak,  though  the  industry  is  more  active  than  it 
was  in  1913.  It  is  said  that  present  curtailment  on  piece  goods  is  about 
25  per  cent.  Woolen  and  worsted  machinery  shows  a  decline  from  the 
high  point,  though  slightly  above  that  of  1913.  Foundry  and  machine 
shop  and  metal  trades  are  considerably  below  1913.  Paper  pulp  and 
printing  also  show  a  falling  off.  In  none  of  the  industries  is  there 
much  stock  on  hand.  Cost  of  production  has  fallen  considerably,  except 
in  the  case  of  woolens,  where  there  has  not  been  much  change  since 
last  year.  Compared  with  1913,  labor  prices  are  more  than  double  and 
wool  prices  50  per  cent,  higher.  Wholesale  prices  have  declined  any¬ 
where  from  10  to  40  per  cent,  within  the  last  two  years,  though  in 
general  they  are  still  above  those  of  -1913. 

The  following  statement  is  made  in  regard  to  the  railroads :  “The 
transportation  situation  is  very  bad;  the  New  York,  New  Haven  and 
Hartford  Railroad  is  and  has  been  for  some  time  on  the  brink  of 
receivership ;  the  Boston  and  Maine  has  recently  gone  through  a  reor¬ 
ganization.  The  successful  operation  of  New  England  railroads  seems 
to  be  impossible  on  the  present  distribution  of  through  rates.”  The 
Soldiers’  Bonus  Bill  is  opposed  by  most  of  the  papers  and  most  of  the 
thoughtful  people,  though,  of  course,  among  the  soldiers  and  their 
friends  it  finds  considerable  favor.  Interest  rates  have  decreased,  the 
minimum  being  5  per  cent.,  and  it  is  expected  that  they  will  not  decline 
much  below  that  figure  during  1922.  The  weak  situations  in  the  busi¬ 
ness  world  are  pretty  well  known,  and  no  unusually  large  number  of 
failures  is  expected.  Exports  have  been  falling  off,  owing  to  a  disin¬ 
clination  on  the  part  of  foreign  customers  to  buy  beyond  their  actual 
necessities. 

A  very  interesting  statement  comes  from  the  central  part  of  the 
state  in  regard  to  the  tariff :  “American  valuation  prevailed  very 
largely  when  first  proposed,  but  to  a  great  extent  opinion  has  changed 
to  foreign  valuation.  The  difficulty  is  in  administering  such  a  law. 
In  the  wool  schedule,  where  shall  be  found  ‘comparable  and  competi¬ 
tive  American  articles,’  exactly  corresponding  to  any  foreign  imported 
articles  ?  A  wide  and  uncertain  approximation  only  is  possible,  causing 
general  uncertainty  and  misgiving.  However,  it  is  now  no  longer  what 
eastern  manufacturers  would  like,  but  what  the  wild  ‘farmer  bloc’  in 
Congress  shall  dictate.  Basing  a  wool  tariff  on  ‘scoured  content’  is 
worse  than  American  valuation,  because  it  is  impossible  to  know  what 
the  scoured  content  of  any  lot  of  wool  is.  How,  then,  can  any  customs 
official  say  what  portion  of  30c.  or  33c.  shall  apply?  In  New  England 


22 


the  sentiment  is  for  a  iow  tariff,  just  high  enough  to  balance  the 
advantage  of  the  foreign  producer  on  account  of  cheaper  labor  and 
manufacturing  cost  abroad.” 

MICHIGAN 

In  Michigan  in  regard  to  manufactured  products  the  statement 
from  all  parts  seems  to  be  that  it  is  about  60  per  cent,  from  the  peak. 
As  compared  with  1913,  of  course,  the  automobile  industry  has  made 
a  great  advance,  the  report  from  the  Detroit  district  being  that  the 
value  in  1914  was  about  $251,000,000  and  in  1920  about  $1,000,000,000. 
It  was  even  higher  in  1919  than  in  1920,  but  since  January  1,  1922, 
there  has  been  a  steady  improvement.  From  the  western  part  of  the 
state  it  is  reported  that  furniture  production  at  present  is  about  back 
to  where  it  was  in  1913,  but  less  than  it  was  in  1920,  though  greater 
than  in  1921.  In  all  cases  the  report  is  that  there  is  very  little 
surplus  of  any  kind  on  hand.  “The  process  of  liquidation  and  the 
scarcity  of  the  necessary  funds  to  finance  production  are  largely  re¬ 
sponsible  for  this  condition.”  Costs  of  production  are  said  to  be  45 
per  cent,  less  than  1921  and  25  per  cent,  less  than  1920,  though  still 
about  what  they  were  in  1913.  Wholesale  prices  have  come  down 
everywhere,  estimates  varying  between  30  per  cent,  and  50  per  cent, 
depending  on  the  lines,  while  for  retail  prices  the  reduction  is  given 
as  being  between  25  per  cent,  and  40  per  cent,  from  the  highest  point. 
From  the  southeastern  part  of  the  state  the  report  is  that  the  pro¬ 
duction  of  raw  materials  is  25  per  cent,  below  the  average  but  is 
about  the  same  as  it  was  in  1913.  From  the  northern  peninsula  it  is 
reported  that  60  per  cent,  of  the  copper  mines  have  been  closed  since 
April  1,  1921,  and  there  is  less  lumber  being  cut  than  two  years  ago 
or  during  1913.  From  the  eastern  part  of  the  state  it  is  reported 
that  there  is  a  surplus  of  lumber,  salt,  and  coal  on  hand.  Reports  are 
unanimous  that  there  has  been  practically  no  use  made  of  the  War 
Finance  Corporation  as  the  banks  themselves  have  been  able  to  finance 
the  needs  of  the  farmers. 

Freight  rates  are  regarded  as  excessive,  and  sentiment  on  the 
Bonus  Bill  is  very  much  divided.  From  the  southeastern  part  of  thq 
state  one  observer  reports  “there  is  much  loose  sentiment  in  Michigan 
for  a  Bonus  Bill,  but  a  substantial  factor  is  opposed  to  it.”  No  in¬ 
crease  of  failures  is  expected  except  among  the  smaller  retailers. 
Borrowers  have  had  no  difficulty  apparently  in  obtaining  credit  in 
any  part  of  the  state  for  legitimate  enterprises,  and  interest  rates  have 
shown  a  tendency  to  decrease  and  are  now  around  6  per  cent,  in 
most  parts  of  the  state.  Not  much  is  said  about  the  Budget  system, 
though  there  seems  to  be  considerable  sentiment  in  favor  of  doing 
away  with  tax-exempt  securities. 


23 


Foreign  trade  has  fallen  off  to  a  very  marked  degree,  and  the 
wish  is  expressed  by  one  observer  “that  the  tariff  may  be  an  equitable 
one  tending  to  increase  trade  with  our  foreign  neighbors.”  As 
regards  American  valuation,  the  sentiment  seems  to  depend  on  the 
line  of  industry  predominant  in  the  various  parts  of  the  state.  The 
view  is  expressed  even  from  the  central  part  of  the  state  that  a 
“readjustment  of  European  finances  is  necessary  for  the  revival  of 
business.” 


MINNESOTA 

In  manufactured  products,  especially  flour,  it  is  stated  that  the 
quantities  are  holding  up  well  with  almost  any  previous  year.  An 
exception  is  made  in  regard  to  agricultural  machinery,  “on  which  de¬ 
mand  has  been  greatly  reduced  on  account  of  short  crops  and  depressed 
prices.”  There  is  a  fairly  large  surplus  of  agricultural  implements 
on  hand,  but  not  of  flour.  Manufacturing  costs  are  less  than  two  years 
ago  and  somewhat  less  than  last  year,  but  are  still  higher  than  1913. 
There  has  been  some  decrease  in  the  cost  of  labor,  but  taxation  shows 
a  heavy  increase  and  is  becoming  extremely  burdensome.  It  is  said 
to  be  a  constant  drain  on  capital  and  reserves  and  is  crippling  all 
business.  In  manufactured  goods  the  decrease  in  wholesale  prices  is 
said  to  be  about  20  per  cent.,  while  retail  prices  have  only  come 
down  10  per  cent,  to  15  per  cent. 

As  regards  agricultural  products,  it  is  supposed  that  grains 
will  be  more  plentiful  than  last  year,  less  than  two  years  ago,  and 
more  than  in  1913.  From  the  northeastern  part  of  the  state  it  is 
reported  that  the  production  of  iron  ore  in  1921  was  about  40  per 
cent,  of  the  1920  production,  and  the  production  of  lumber  is  also 
less.  Dairy  products  have  been  steadily  increasing.  It  is  said  that 
there  are  still  some  stocks  of  wheat,  corn,  and  oats  in  the  hands  of 
producers,  and  lumber  is  plentiful.  There  is  no  surplus  of  ore,  most 
of  the  mines  being  shut  down.  The  wholesale  prices  of  farm  products 
reached  a  low  point  last  fall  but  are  now  gradually  rising.  Retail 
prices  have  followed  the  general  trend  but  with  a  spread  of  six  months 
or  more  in  time. 

In  northeastern  Minnesota,  where  there  is  little  farming,  the  facil¬ 
ities  of  the  War  Finance  Corporation  have,  of  course,  been  little  used. 
For  the  rest  of  the  state,  however,  the  statement  is  made  that  they  re¬ 
lieved  the  central  depositories  carrying  reserves  of  country  banks  but 
did  not  afford  any  direct  relief  to  the  farmers  as  they  were  already 
overextended.  From  the  southern  part  of  the  state  the  following 
report  is  received :  “There  is  a  very  much  better  feeling  among  the 
farmers,  and  the  people,  generally,  as  spring  approaches,  seem  to 
feel  that  there  will  be  improvement  this  year.  Prices  for  corn  and 

24 


hogs  have  been  very  satisfactory,  but  small  grain  prices  are  not  suf¬ 
ficient  to  bring  any  revenue  to  come  near  cost  of  production.  Cattle 
prices  are  better  than  a  few  months  back.  The  horse  market  is  very 
poor.  There  are  a  great  many  farmers  with  a  surplus  of  horses ;  this 
is  due  to  the  war,  as  many  went  into  horse  raising  when  the  govern¬ 
ment  purchased.  Hardware  and  implements  should  be  cut  about  50 
per  cent,  to  get  within  reach  of  the  farmer  and  builder.  It  is  generally 
thought  that  there  has  been  wonderful  progress  made  by  the  party- 
in  power.” 

The  railroad  situation  is  regarded  as  serious  and  it  is  believed 
that  there  should  be  a  prompt  reduction  of  freight  rates  from  10  per 
cent,  to  30  per  cent,  which  should  become  effective  this  season.  From 
the  Minneapolis  district,  the  following  report  is  received:  “Probably 
the  majority  of  voters  would  favor  the  Bonus  Bill,  but  the  people 
who  do  the  serious  thinking  are  opposed  to  it.  The  soldiers  themselves 
would  be  better  off  if  the  money  were  not  raised  by  taxation,  as  it 
must  be,  and  were  left  in  industries.  Manufacturers  and  business 
firms  cannot  increase  their  facilities  for  doing-  business  and  thus  make 
more  business  and  give  more  employment  if  the  best  part  of  their 
profits,  if  there  are  any,  must  be  taken  out  and  reserved  continually 
for  taxes.  This  situation  has  already  gone  too  far.  Merchants  through¬ 
out  the  territory  are  getting  more  hard  up,  “collections  are  getting 
harder  and  the  bankers  throughout  the  country  are  able  to  do  less  for 
them.  A  much  larger  per  cent,  of  the  best  class  of  merchants  are 
failing  and  getting  in  serious  financial  shape,  and  I  believe  profits 
taxation  is  more  to  blame  than  is  generally  supposed.” 

Sentiment,  as  expressed,  seems  to  be  in  favor  of  a  high  tariff, 
and  it  is  also  said  that  there  is  considerable  sentiment  in  favor  of  a 
constitutional  amendment  to  eliminate  tax-exempt  securities.  Interest 
rates  have  decreased  iy2  per  cent,  to  2  per  cent.,  but  are  still  around 
8  per  cent,  to  10  per  cent.  The  best  commercial  paper  rate,  however, 
is  said  to  be  5y2  per  cent,  and  not  much  change  is  expected.  There 
has  been  a  considerable  increase  in  business  failures  during  the  past 
year,  but  a  gradual  improvement  is  anticipated.  There  is  no  interest 
displayed  in  the^export  import  situation. 

MISSISSIPPI 

Mississippi  has  very  little  manufacturing,  but  such  manufacturing 
industries  as  there  are  are  producing  less  than  within  recent  years  and 
have  no  surplus  of  stock  on  hand.  Costs  are  less,  as  are  also  prices, 
both  wholesale  and  retail.  In  regard  to  raw  products,  there  is  25 
per  cent,  less  of  cotton  and  lumber  than  two  years  ago,  and  about  the 
same  as  in  1913.  On  the  other  hand,  hogs,  cows,  poultry,  and  corn 
have  increased  very  markedly.  The  reduction  in  costs  is  said  to  ap- 

25 


proximate  something  like  40  per  cent,  in  the  last  two  years,  and  10 
to  15  per  cent,  within  the  last  year.  There  has  been  considerable  use 
made  of  the  facilities  of  the  War  Finance  Corporation  throughout 
the  state. 

The  railroads  are  not  in  the  best  situation.  From  the  Delta  sec¬ 
tion  a  report  is  received  that  one  road  is  in  the  hands  of  a  receiver, 
and  some  of  its  branches  are  about  to  be  junked.  Freight  rates  are 
said  to  be  too  high,  and  the  suggestion  to  reduce  wages  and  other 
railroad  costs,  so  that  freight  rates  may  be  reduced,  is  generally 
approved. 

In  regard  to  the  soldiers'  bonus  one  report  is  as  follows:  “Senti¬ 
ment  favors  amply  providing  for  and  properly  compensating  the 
wounded  and  disabled  soldiers,  but  there  has  been  no  general  senti¬ 
ment  favoring  a  cash  bonus  for  all  ex-service  men.  Even  the  local 
American  Legion  Post  went  on  record  as  opposing  a  soldiers’  bonus. 
This  was  when  the  subject  was  first  proposed.  Whether  or  not  the 
Post  has  reversed  itself  on  this,  I  am  not  advised.” 

Sentiment  is  entirely  in  favor  of  a  low  tariff.  Interest  rates  have 
shown  very  little  change,  and  while  not  many  more  failures  are  ex¬ 
pected  there  is  a  feeling  that  it  will  be  some  time  before  things  will 
be  in  satisfactory  shape.  The  sentiment  is  expressed  that  readjustment 
is  being  held  back  because  of  unsettled  conditions  in  Europe,  failure 
to  pass  the  peace  treaty,  and  high  freight  rates.  This  general  state¬ 
ment  of  interest  is  made :  “Our  problem,  locally,  is  to  educate  the  farmer 
to  live  at  home,  which  is  what  we  are  trying  to  do.  We  have,  as 
banks,  made  it  compulsory  for  the  farmer  to  raise  his  foodstuffs  and 
stock  feed  before  we  would  agree  to  finance  him  in  taking  care  of 
his  crop.  We  have  attempted,  more  or  less  successfully,  to  induce 
every  farmer  to  raise  hogs,  poultry,  dairy  cows,  and  all  kinds  of  food 
crops,  instead  of  having  to  buy  them.  We  feel  that  this  must  be  done, 
for  by  raising  a  truly  diversified  crop,  the  cotton  acreage  will  be  re¬ 
duced  automatically,  which  will  prevent  a  surplus  of  cotton.  Our 
motto  is,  ‘Raise  enough  corn,  food  crops,  and  stock  feed,  for  your 
own  use ;  then  raise  all  the  cotton  you  can.’  ” 

MISSOURI 

In  general,  production  of  manufactures  has  fallen  off  in  Missouri, 
except  flour,  which,  according  to  a  report  from  the  central  part  of 
the  state,  is  being  produced  in  greater  quantities  than  last  year  and 
the  year  before,  but  less  than  in  1913.  The  only  surplus  of  stocks  is  in 
the  case  of  some  of  the  by-products  of  the  packing  industry.  Manu¬ 
facturing  costs  at  the  present  time  are  considerably  less  than  in  the 
two  previous  years,  due  to  several  reasons,  chief  among  them  being 
increased  efficiency,  reduction  in  overhead,  and  some  reduction  in  labor 

26 


costs.  The  valuation  rates  for  taxation  were  also  decreased  from 
10  to  75  per  cent.,  varying  according  to  the  different  lines  of  merchan¬ 
dise,  the  average  decrease  being  about  38  per  cent.  Construction  costs 
have  materially  decreased,  principally  on  account  of  milch  lower  prices 
for  lumber.  In  general,  wholesale  and  retail  prices  are  lower,  though 
the  latter  not  in  the  same  proportion  as  the  former.  As  regards  raw 
products,  there  was  more  grain  handled  in  1921  than  in  any  previous 
year.  The  receipts  and  shipments  of  fruits  and  vegetables,  as  well 
as  oil,  were  about  normal.  There  is  no  surplus  on  hand.  Cattle  de¬ 
creased  within  the  year  by  about  2.3  per  cent.  Milk  cows  increased 
1.3  per  cent.;  hogs  increased  8.6  per  cent.;  sheep  decreased  6.4  per 
cent. ;  and  mules  increased  one-half  per  cent.  There  has  also  been  a 
slight  increase  in  coal,  as  compared  with  last  year,  and  the  production 
of  salt  has  increased  by  about  15  per  cent.  Considerable  coal  was 
stored  to  provide  for  the  expected  miners’  strike.  There  was  a  de¬ 
creased  cost  of  production  in  all  industries  except  coal  mining,  as 
compared  with  1921  and  1920,  but  cost  was  still  above  1913.  Whole¬ 
sale  prices  showed  a  decrease  from  last  year  in  most  lines  except  hogs 
and  sheep,  but  increased  in  lead  and  zinc,  in  which  there  was  very 
little  change.  Considerable  use  was  made  of  the  facilities  of  the  War 
Finance  Corporation  in  the  western  and  southern  part  of  the  state  but 
evidently  not  much  in  the  central  part. 

There  is  a  general  feeling  throughout  the  state  that  freight  rates 
are  too  high,  but  the  observation  is  made  that  the  question  of  the 
rehabilitation  of  the  railroads  has  not  provoked  much  discussion. 
"The  farmers  are  disposed  to  consider  effects  rather  than  causes,  and 
inveigh  against  existing  rates,  without  considering  the  financial  con¬ 
dition  and  obligations  of  the  carriers.”  There  is  some  agitation  among 
the  farmers  in  favor  of  a  constitutional  amendment  to  eliminate 
tax-exempt  securities.  Sentiment  favors  a  protective  tariff  for  agri¬ 
culture,  manufacturing,  and  petroleum.  At  present  borrowers  are 
finding  little  difficulty  in  obtaining  the  necessary  credit  from  banks, 
provided  the  security  is  ample.  Interest  rates  are  about  7  per  cent, 
on  real  estate,  and  8  per  cent,  on  personal  loans,  with  a  tendency 
toward  lower  rates.  Not  many  failures  have  taken  place.  "Most 
of  the  adjustments  by  business  concerns  have  already  been  made, 
and  those  that  have  survived  should  be  on  a  sound  financial  basis, 
and  with  careful  management  should  continue  so.”  There  is  very  little 
interest  in  the  question  of  the  Federal  budget,  and  not  much  direct 
concern  about  the  foreign  situation. 

MONTANA 

In  Montana,  manufacturing  consists  chiefly  of  flour  and  the  mills 
are  running  about  50  per  cent,  of  maximum  capacity,  which  is  about 

27 


the  same  as  in  1913.  There  is  also  some  oil  refining,  but  it  is  a 
new  industry  so  that  comparisons  are  impossible.  In  the  central  part 
of  the  state  the  output  is  supposed  to  be  about  1,500  barrels.  Mining, 
which  is  such  an  important  factor  in  Montana,  is  not  in  a  very 
prosperous  condition.  Mines  have  been  closed  down  and  only 
reopened  at  the  beginning  of  this  year.  There  is  still  a  large  surplus 
of  copper  and  other  ores  on  hand,  coal  being  the  exception  in  this 
respect.  Prices  are  20  per  cent,  to  35  per  cent,  less  than  they  were 
two  or  three  years  ago,  while  lumber  has  been  reduced  about  15  per  cent, 
in  price. 

The  cattle  industry  has  suffered  very  heavily.  “The  cattle  and 
sheep  industry  has  declined  more  than  fifty  per  cent,  due  to  the 
lack,  two  years  ago,  of  feed  and  pasturage  and  also  to  the  money 
depression.  Grains  have  also  declined  about  40  or  50  per  cent,  due 
to  the  drouth  of  the  last  two  or  three  years.  The  acreage  for  this  year 
is  going  to  be  less  for  the  same  reason,  as  there  was  not  sufficient 
moisture  last  fall  to  put  in  a  winter  wheat  crop.  The  sugar  beet 
industry  on  irrigated  land  has  been  on  the  increased  The  cost  of 
production  in  the  cattle  industry  has  come  down  owing  to  the  fact  that 
there  has  been  a  20  per  cent,  reduction  in  wages  for  cattle  and  sheep 
hands  since  1920,  but  the  costs  are  not  yet  down  to  the  1913  level. 
General  ranch  supplies  are  about  20  per  cent,  less  than  two  years 
ago  and  at  the  same  time  it  costs  on  an  average  50  per  cent,  more  to 
market  live  stock  than  it  did  in  1913. 

The  statement  is  made  from  the  southwestern  part  of  the  state 
that  “Freight  rates  make  transportation  of  cattle  from  one  point 
to  another  practically  prohibitory.  Last  fall  it  was  impossible  to 
ship  an  old  cow,  or  an  old  ewe,  to  market.  The  transportation  charge 
was  greater  than  the  animal  would  bring  at  the  market.  One-third 
of  the  market  price  of  our  best  fattened  beef  or  mutton  goes  for 
freight.  Hay  is  not  worth  the  freight  to  market.  Our  products 
are  down  to  pre-war  prices  or  below.  We  must  have  freights 
on  same  basis  if  our  people  are  to  do  business  successfully.  We 
appreciate  that  this  can  come  only  through  reduction  of  wages. 
Farmers  and  stockholders  favor  this  reduction.”  The  War  Finance 
Corporation  has  been  of  very  material  assistance  and  benefit,  especially 
to  livestock  interests,  and  the  loans  placed  in  Montana  have  been  large. 

Business  organizations  have  gone  on  record  as  against  the 
Soldiers’  Bonus  Bill,  but  undoubtedly  a  majority  of  the  population 
is  in  favor  of  it.  From  most  parts  of  the  state  the  expression  of 
opinion  seems  to  be  in  favor  of  a  high  tariff.  There  is  very  little 
interest  in  the  question  of  tax-exempt  securities  and  the  budget 
system.  Failures  have  been  large,  but  it  is  hoped  that  with  improved 

28 


conditions  the  situation  will  right  itself.  There  has  been  a  gradual 
easing  of  interest  rates,  which  recently  have  been  high. 

The  report  is  made  that  “There  seems  to  be  a  definite  improvement 
in  business.  Conditions  are  still  not  active  owing  to  depression  in 
live  stock,  but  the  morale  of  both  business  men  and  farmers  is  improv¬ 
ing,  and  there  will  be  no  tendency  to  withhold  effort  to  seed  the 
largest  possible  acreage  and  to  supply  all  possible  energy  in  order 
to  recover  the  ground  lost  in  the  period  of  readjustment.” 

From  the  Butte  district  the  following  general  report  is  made: 
“This  community  is  dependent  almost  entirely  upon  copper.  On 
account  of  connections  made  by  the  largest  operator  with  domestic 
manufacturers,  Montana  will  not  be  dependent  upon  the  foreign  market. 
Production  will  depend  on  domestic  consumption  putting  it  upon 
a  better  basis.  The  market  for  cattle  and  cattle  products  depends 
to  some  extent  on  the  foreign  market.  Sheep  and  wool  markets  are 
improving  and  better  conditions  exist  in  the  wool  market  especially.” 

NEBRASKA 

The  output  of  the  packing  houses  in  Nebraska  is  less  than  in 
1919  but  more  than  in  1913.  There  is  very  little  surplus  on  hand,  and 
in  general  the  cost  of  production  has  decreased,  though  there  has  been 
an  increase  of  40  to  60  per  cent,  in  transportation,  while  taxes  have 
increased  60  to  7 5  per  cent.  Wholesale  prices  of  goods  are  about 
25  to  40  per  cent  less  than  in  recent  years,  and  retail  prices  have 
followed  slowly.  In  regard  to  raw  materials,  the  general  report 
for  the  State  of  Nebraska  is  that  the  farmers  have  70  per  cent,  of  the 
corn  crop  of  1921  on  hand,  and  40  percent,  of  the  crop  of  1920. 
According  to  a  report  from  the  south  central  part  of  the  state,  how¬ 
ever,  last  year’s  crop  on  hand  amounts  to  about  16  per  cent,  of  the 
total  of  wheat,  and  40  per  cent,  of  the  total  of  corn.  In  the  grass  cattle 
country  of  Nebraska  there  is  on  the  ranches  about  50  per  cent,  of  a 
normal  year,  taking  1913  as  a  basis.  In  some  counties  there  has  been 
a  shortage  of  as  high  as  70  per  cent.  Hogs  are  reported  to  be  only  50 
per  cent,  of  a  normal  year.  This  is  also  shown  by  the  receipts  of 
hogs,  cattle,  and  sheep  at  Omaha,  all  of  which  are  considerably  lower 
than  last  year.  Taxes,  it  is  stated,  have  increased  to  a  point  that 
needs  careful  attention.  The  situation  in  Nebraska  has  been  much 
relieved  by  the  loans  of  the  War  Finance  Corporation,  and  as  wheat 
and  corn  have  increased  somewhat  in  price  the  feeling  has  improved 
very  much  in  recent  months. 

Freight  rates  are  regarded  as  excessive,  and  it  is  stated  that  it 
costs  in  many  instances  as  much  to  get  the  cattle  or  crop  to  market 
as  the  gross  yield  amounts  to  from  these  products.  Sentiment  seems 
to  be  in  favor,  on  the  whole,  of  the  Soldiers’  Bonus.  There  is  very 


29 


little  expression  of  opinion  in  regard  to  tax-exempt  securities.  Interest 
rates  have  decreased  but  are  still  rather  high,  and  it  is  expected  that 
in  some  districts  the  usual  counter  rate  will  continue  to  be  10  per 
cent.  There  have  been  few  failures  in  Nebraska  among  business 
people,  but  some  bank  failures.  Such  opinion  as  has  been  given 
is  in  favor  of  a  budget  system  by  the  Federal  Government.  The 
opinion  is  expressed  that  world  politics  has  much  to  do  with  holding 
back  a  speedy  readjustment,  but  “Both  wheat  and  corn  have  been 
sold  more  freely  for  export  with  good  prices  during  the  last  90 
days,  and  meat  products  also  have  sold  well  and  caused  live  stock 
to  bring  good  prices  at  packing  centers.” 

NEVADA 

There  has  been  no  copper  production  since  the  war  ended,  and 
gold  production  has  also  been  below  normal,  though  it  is  beginning 
slowly  to  revive.  The  opinion  is  expressed  that  “Hard  times  always 
send  the  prospectors  to  the  hills,  and  they  always  increase  gold  and 
silver  production.”  Silver  production  is  said  to  have  increased  about  30 
per  cent.  There  is  a  little  copper  on  hand,  but  not  very  much.  Miners’ 
wages  have  been  reduced  in  some  places  to  1913  rates,  and  it  is  said 
that  the  cost  of  producing  copper  will  be  40  per  cent,  less  than  two 
years  ago. 

As  regards  sheep  and  cattle,  the  conditions  have  not  changed  very 
much  in  recent  years.  The  increase  in  price  of  sheep  and  cattle  within 
the  last  months  has  helped  out  the  situation  very  much.  The  War 
Finance  Corporation  has  helped  the  live  stock  industry,  but  freight 
rates  have  proved  to  be  a  great  burden. 

The  people  are  said  to  be  favorable  to  the  Bonus  Bill  and  a  sales 
tax  is  suggested  as  a  means  of  raising  the  necessary  revenue.  There 
is  no  opinion  expressed  as  regards  the  tariff,  or  in  regard  to  tax- 
exempt  securities.  European  conditions  are  given  as  one  of  the  causes 
holding  back  a  general  readjustment  of  conditions. 

NEW  HAMPSHIRE 

Manufactures  in  New  Hampshire  have  fallen  off  considerably 
and  less  lumber  is  being  cut.  Of  the  latter  it  is  said  that  there  is  a  sur¬ 
plus  on  hand.  The  sentiment  is  strongly  in  favor  of  a  high  tariff. 
Interest  rates  were  not  raised  during  the  war,  the  banks  never  charging 
more  than  6  per  cent.  The  tendency  is  for  them  to  drop  to  5  per  cent. 
There  have  been  few  failures  and  no  more  are  expected.  High  labor 
costs  are  ascribed  as  the  cause  for  holding  back  a  speedy  readjustment. 

NEW  JERSEY 

In  New  Jersey  production  of  manufactured  goods  is  somewhat  less 
than  it  has  been  in  recent  years,  and  there  has  been  a  slight  decrease 


30 


in  prices.  It  is  said  that  there  is  not  much  change  in  the  situation  in 
regard  to  the  production  of  fruits  and  vegetables. 

NEW  MEXICO 

Mining  is  said  to  be  languishing,  and  there  is  a  surplus  of  copper 
on  hand.  There  is  said  to  be  considerably  less  sheep  and  cattle  at 
present  than  there  were  a  few  years  ago,  but  the  production  of  beans 
and  alfalfa  is  about  15  per  cent,  more  than  it  has  been  in  recent  years. 
The  costs  of  production  are  less  than  they  were  two  years  ago,  but 
greater  than  in  1913.  The  price  of  sheep  and  cattle  has  improved,  and 
also  of  wool.  Alfalfa  is  somewhat  cheaper.  Considerable  use  has  been 
made  in  New  Mexico,  especially  for  live  stock  purposes,  of  the  facilities 
of  the  War  Finance  Corporation.  It  is  reported  that  the  railroad  situ¬ 
ation  is  bad.  ‘‘Industries  of  New  Mexico  cannot  continue  to  prosper 
or  exist  under  the  present  transportation  costs  without  a  very  large 
increase  in  price  of  the  products  of  the  state,  and  this  increase  is  not 
probable.  For  instance,  the  present  freight  on  a  car  of  alfalfa  from 
Roswell,  New  Mexico,  to  an  average  point  in  Texas  is  $9.60  per  ton,  as 
compared  with  $4.50  per  ton  in  1914;  the  rate  on  100  pounds  of  apples 
from  Roswell  to  the  same  point  is  now  91  cents,  as  against  45  cents 
formerly.  Rates  are  excessive  to  50  per  cent,  degree.  This  is  especially 
applicable  to  this  portion  of  the  state  (southeastern).” 

Opinion  about  the  Soldiers’  Bonus  Bill  is  evidently  very  much 
divided,  while  as  regards  the  tariff,  it  is  generally  in  favor  of  high 
rates  on  wool,  sheep,  cattle  and  hides.  Money  is  inclined  to  be  lower, 
though  the  average  rate  in  New  Mexico  is  about  10  per  cent.  The 
opinion  is  expressed  by  several  observers  that  there  is  not  enough 
capital  in  the  state  to  take  care  of  borrowers,  and  that  there  is  therefore 
considerable  difficulty  in  obtaining  the  necessary  credit.  Failures  have 
been  increasing  slightly,  and  it  is  believed  that  there  will  be  a  consid¬ 
erable  number  during  the  rest  of  the  year,  even  though  the  worst  may 
be  over. 

NEW  YORK 

The  state  of  New  York  reflects  in  such  a  marked  degree  the  con¬ 
ditions  of  the  whole  country,  and  its  range  of  productivity  is  so  exten¬ 
sive  that  it  is  very  difficult  to  do  more  than  make  very  general 
statements,  such  as  one  might  make  of  the  country  as  a  whole.  In 
regard  to  manufactures,  it  must  be  remembered  that  New  York  pro¬ 
duces  about  one-eighth  of  the  country’s  total  and  that  the  wage  earners 
in  New  York  City  alone  number  nearly  1,300,000,  while  the  number  of 
its  establishments  in  1919  was  32,626.  If  compared  with  1913  there 
has  been  a  great  increase  of  production  in  nearly  all  lines,  but  since  1920 
there  has  been  a  marked  reduction  in  most  lines.  There  has  been 


31 


a  large  decrease  in  the  business  of  the  wholesalers  as  regards  value, 
though  the  quantities  are  probably  very  close  to  those  of  last  year.  The 
retail  trade  shows  the  same  phenomenon  as  the  wholesale  trade,  except 
that  in  quantity  the  amount  of  goods  is  perhaps  larger  than  it  has  been 
in  recent  years.  “Production  costs  are  still  above  1913,  but  well  below 
1920  and  1921.  Wage  reductions  have  been  very  unequal  in  different 
lines.  It  is  thought  that  further  wage  readjustments  as  well  as  further 
price  readjustments  must  continue  before  a  relatively  normal  equilibrium 
is  reached/’  Wholesale  prices  of  manufactured  goods  have  declined. 
The  average  is  probably  40  per  cent,  below  the  peak.  “Retail  prices 
have  declined  along  with  wholesale  prices,  although  these  declines  have 
not  been  so  precipitous.” 

The  amount  of  agriculture  has  been  increasing  and  is  perhaps  20 
per  cent,  larger  than  it  was  in  1913.  From  the  central  part  of  the  state 
it  is  reported  that  there  is  a  considerable  surplus  of  wheat  on  hand.  As 
regards  fruit,  there  was  a  surplus  in  1920,  but  1921  was  a  very  poor 
year. 

Railroads  are  said  to  be  making  some  progress  in  effecting  neces¬ 
sary  economies,  which  are  showing  good  results.  From  New  York 
City  it  is  reported  that  conditions  will  be  enormously  improved  when 
the  port  of  New  York  authorities  complete  their  comprehensive  scheme 
of  a  belt  line  railroad  connecting  the  various  warehouses.  The  port 
district  now  comprises  105  municipalities  in  New  York  and  New  Jersey. 
“Freight  rates  are  generally  considered  too  high,  but  it  is  not  felt  that 
any  particular  class  is  being  discriminated  against  except  perhaps  that 
coal  rates  are  regarded  as  excessive.” 

In  New  York  “sentiment  was  formerly  in  favor  of  high  protection, 
but  much  consideration  is  being  given  to  factors  such  as  the  shift  in  the 
American  position  from  a  debtor  to  a  creditor  nation,  which  renders  a 
high  protection  policy  of  doubtful  expediency.  It  cannot  be  said  that 
a  definite  trend  of  sentiment  has  yet  been  established.” 

Sentiment  in  regard  to  the  Bonus  Bill  is  very  much  divided,  but 
among  the  financial  interests  the  feeling  is  that  if  such  a  measure  is 
to  be  adopted  the  sums  needed  ought  to  be  raised  by  means  of  a  sales 
tax.  There  is  considerable  sentiment,  apparently,  in  favor  of  a  consti¬ 
tutional  amendment  to  eliminate  tax-exempt  securities.  Interest  rates 
have  declined  in  a  marked  degree,  as  is  shown  by  the  successive  low¬ 
ering  of  rediscount  rates  by  the  Federal  Reserve  Bank  of  New  York. 
The  rate  in  future  depends  largely  on  the  course  of  business.  “Should 
activity  expand,  as  seems  not  unlikely,  rates  will  probably  remain  not 
far  from  the  present  level,  although  the  present  declining  tendency  will 
doubtless  continue  for  the  immediate  future.”  At  the  same  time  legiti¬ 
mate  business  enterprises  have  no  difficulty  at  all  in  obtaining  the  neces¬ 
sary  credits  from  their  banks.  Failures  in  the  beginning  of  the  year 


32 


reached  a  very  high  level,  but  they  are  now  tending  to  decline,  and  it  is 
believed  that  the  worst  is  over.  It  is  felt  that  the  present  budget  system 
does  not  accomplish  all  that  is  desired,  but  “The  advisability  of  an 
amendment  is  doubted,  at  least  until  after  further  experience  of  the 
present  law.” 

In  general,  it  is  felt  in  New  York  that  substantial  progress  in  read¬ 
justment  has  been  made.  “Surplus  stocks  are  pretty  well  reduced; 
farm  outlook  is  substantially  better ;  costs  of  raw  materials  are  for  the 
most  part  liquidated ;  a  situation  of  increasing  stability  is  being  attained 
on  both  the  supply  and  demand  side ;  high  rents  and  high  prices  for 
coal  are  militating  against  readjustments,  as  also  the  high  labor  costs.” 

NORTH  CAROLINA 

The  cotton  mills  are  producing  a  little  more  than  in  1913,  owing 
to  the  expansion  brought  on  by  the  war.  Cost  of  production  is  25  per 
cent,  more  than  in  1913,  as  a  result  of  increase  in  wages,  but  wholesale 
and  retail  prices  have  fallen  in  the  last  few  years.  It  is  reported  from 
the  southern  part  of  the  state  that,  owing  to  the  boll  weevil,  farmers 
have  begun  to  plant  orchards,  and  also  because  of  the  low  price  of  cotton 
there  has  been  a  reduction  of  crop  of  60  per  cent,  in  the  last  two  years. 
In  spite  of  this  there  is  some  surplus  of  cotton  in  the  hands  of  the 
farmers.  From  the  eastern  part  of  the  state  it  is  reported  that  factories 
turning  out  wood  products  are  finding  the  cost  40  per  cent,  less  than 
in  1920,  but  higher  than  in  1913.  From  the  north  central  part  of  the 
state  it  is  reported  that  tobacco  has  fallen  off  50  per  cent,  in  the  last 
year  and  20  per  cent,  if  compared  with  two  years  ago. 

The  facilities  of  the  War  Finance  Corporation  have  been  used  to 
some  extent.  The  state  is  said  to  be  in  favor  of  a  low  tariff.  There 
is  a  growing  sentiment  against  tax-exempt  securities.  Money  is  now 
easier,  but  much  trouble  has  been  caused  to  borrowers  owing  to  the 
decline  in  the  price  of  cotton.  Money  rates  have  not  declined  to  any 
extent,  but  it  is  expected  that  in  the  course  of  the  year  there  will  be 
some  fall  in  interest  rates. 

From  the  southern  part  of  the  state  the  following  general  report  is 
made :  “Reduction  in  acreage  and  a  smaller  cotton  crop,  with  a  dimin¬ 
ished  cotton  surplus,  will  have  a  tendency  to  force  a  better  price  for  the 
next  cotton  crop,  which  will  be  produced  at  a  profit  or  nearer  a  profit, 
and  not  at  less  than  cost  of  production,  which  has  been  the  condition.” 

NORTH  DAKOTA 

In  North  Dakota  the  flour  mills  are  turning  out  about  the  same 
as  last  year,  while  the  meat  packing  industry,  which  started  last  year, 
is  having  an  output  double  that  of  last  year.  It  is  not  believed  that 


33 


there  is  much  surplus  of  stocks  on  hand.  Costs  are  supposed  to  be 
30  per  cent,  less  than  in  1913.  In  regard  to  raw  products,  there  has 
been  a  decrease  of  25  per  cent,  in  grains  and  20  per  cent,  in  beef  and 
cattle,  but  an  increase  of  20  per  cent,  in  dairy  products  and  25  per  cent, 
in  coal,  which  is  just  beginning  its  development.  Over  last  year  there 
is  also  an  increase  of  25  per  cent,  in  hogs.  In  most  parts  of  the  state 
more  grain  than  usual  is  being  held.  Costs  of  production  are  consid¬ 
erably  less  than  two  years  ago,  but  at  least  25  per  cent,  higher  than  in 
1913.  It  is  said  that  ordinary  labor  is  back  to  normal.  The  1921  crop 
was  raised  at  a  cost  considerably  less  than  that  of  1920.  Taxes  in¬ 
creased  15  per  cent,  in  1921  and  are  100  per  cent,  more  than  in  1917. 
Wholesale  prices  are  said  to  be  about  20  per  cent,  lower  than  the  peak 
and  retail  prices  have  followed  the  general  trend,  except  that  cattle 
has  recently  increased  in  price.  The  price  of  butter  is  said  to  be  down 
50  per  cent,  since  January,  1922,  due  to  large  imports. 

The  facilities  of  the  War  Finance  Corporation  have  been  largely 
used.  From  the  southeastern  part  of  the  state  comes  the  following 
report:  “Banks,  generally  speaking,  have  availed  themselves  of  this 
assistance,  but  it  has  in  no  way  increased  available  funds  for  new  loans. 
This  money  has  been  used  in  paying  off  bills  payable  to  reserve  banks 
in  reserve  cities.  Local  banks  are  thereby  given  a  chance  to  extend 
their  loans  already  in  the  hands  of  the  farmers/’ 

From  an  eastern  point  of  the  state  comes  the  following  report  in 
regard  to  the  railroads,  which  seems  to  express  a  general  sentiment : 
“The  railroads  are  serving  the  state  well,  but  rates  are  intolerable. 
The  general  level  of  rates  in  our  state  is  higher  than  that  of  any  of  the 
adjoining  states  and  of  any  other  state  with  like  physical  conditions. 
People  generally  feel  that  in  this  respect  they  are  being  unfairly  treated. 
The  farmer  also  recognizes  that  freight  cannot  be  added  to  his  cost  of 
production ;  that  increased  freight  charges  mean  decreased  prices  for 
his  product.  Because  of  this  he  feels  that  there  should  be  recognition 
of  this  fact  in  the  fixing  of  freight  rates.”  There  is  some  opposition  to 
the  Bonus  Bill,  but  evidently  not  as  much  as  in  some  of  the  states. 
Interest  rates  are  still  high,  and  it  seems  to  be  expected  that  there  will 
not  be  much  change  until  another  crop  matures.  According  to  some 
statements  most  banks  are  overextended  and  are  unable  to  give  further 
assistance.  There  is  a  decided  sentiment  in  the  state  to  eliminate  tax- 
exempt  securities. 

In  regard  to  general  conditions,  one  careful  observer  reports  as 
follows:  “In  North  Dakota,  where  we  rely  mainly  on  products  from 
the  farm,  anything  that  vitally  affects  the  farmer  affects  business  as  a 
whole.  Short  crops  and  extremely  high  prices  for  everything  the 
farmer  has  to  use,  together  with  sharply  falling  prices  again  just  when 
crops  were  ready  to  market,  have  caused  stagnation  in  business  circles 


34 


out  of  which  we  are  just  emerging.  The  silver  lining  is  the  fact  that  the 
average  farmer  turns  to  a  more  diversified  system  of  farming  and  also 
keeps  his  weather-eye  open  for  the  fake  stock  salesman  that  leaches 
the  country  in  the  good  years.  We  expect  to  see  our  state  on  a  higher 
plane  five  years  from  now  than  it  ever  has  been,  both  in  the  soundness 
of  our  farmers  and  business  men  and  also  in  the  methods  of  doing 
business.” 

OHIO 

Ohio  has  large  industries  connected  with  the  production  of  auto¬ 
mobiles,  and  as  this  has  expanded  enormously  since  1913  there  is  a  much 
larger  production  in  all  lines  connected  with  the  automotive  industry 
than  there  was  in  1913  in  spite  of  the  slump  that  has  taken  place  within 
the  last  two  years.  In  the  clothing  line,  however,  there  has  been 
some  decrease  in  production  recently,  though  not  much.  Cost  of  pro¬ 
duction  is  regarded  as  having  been  reduced  anywhere  from  25  to  50 
per  cent,  in  the  last  two  years,  but  still  considerably  above  what  it  was 
in  1913.  In  many  lines  there  are  still  large  inventories  on  hand. 

In  regard  to  agriculture,  conditions  do  not  seem  to  have  changed 
much  in  most  parts  of  Ohio.  In  the  southern  part  of  the  state,  how¬ 
ever,  the  wheat  crop  last  year  was  a  total  failure.  There  is  a  surplus 
of  corn  on  hand  in  several  parts  of  the  state  and  about  the  usual  amount 
of  live  stock.  As  Ohio’s  agricultural  industries  supply  chiefly  a  local- 
market,  the  state  has  not  suffered  in  that  regard  as  much  as  some  other 
parts  of  the  country,  though  there  also  has  been  considerable  fall  in 
prices  within  the  last  two  years.  Corn  has  gone  down  in  the  last  two 
years  from  $2.10  to  35  cents  a  bushel,  and  wheat  from  $2.90  to  90 
cents.  The  cost  of  production  has  not  fallen  in  the  same  proportion. 
There  has  been  some  use  made  of  the  facilities  of  the  War  Finance 
Corporation. 

Freight  rates  are  said  to  be  excessive,  but  the  railroads  are  said  to 
be  in  a  fair  condition,  and  there  is  not  very  much  complaint  about  the 
service.  As  Ohio  voted  three  to  one  in  favor  of  a  constitutional  amend¬ 
ment  permitting  the  state  to  pay  a  bonus  to  all  soldiers,  it  is  generally 
presumed  that  the  vast  majority  of  the  people  are  in  favor  of  a  bonus 
by  the  Federal  Government.  Views  in  regard  to  the  tariff  are  much 
divided,  but  there  is  considerable  sentiment  in  favor  of  the  principle  of 
American  valuation.  Apparently,  there  is  not  much  agitation  in  favor 
of  the  elimination  of  tax-exempt  securities,  and  though  some  reports 
speak  of  the  sentiment  against  such  securities  as  growing,  on  the 
whole  the  question  does  not  seem  to  arouse  much  interest.  Interest 
rates  have,  generally  speaking,  decreased  1  to  1J4  per  cent.,  and 
further  slight  reductions  are  expected.  Failures  have  been  numerous 
in  some  parts  of  the  state,  but  it  is  expected  that  the  worst  is  over. 


35 


There  is  no  special  interest  displayed  in  the  question  of  the  Federal 
budget,  and  very  few  expressions  of  opinion  in  regard  to  the  condition 
of  our  foreign  trade. 

OKLAHOMA 

The  production  of  oil  is  said  to  have  increased  since  last  year, 
is  somewhat  less  than  two  years  ago,  but  very  much  more  than  in  1913. 
The  production  of  lead  and  zinc  has  been  greatly  reduced  lately,  as 
also  the  production  of  coal.  There  is  said  to  be  considerable  of  all 
these  materials  in  storage.  Costs  of  production  are  less  than  two 
years  ago,  but  higher  than  in  1913.  There  is  said  to  be  a  great  increase 
in  price  of  natural  gas,  and  oil  products  have  also  gone  up  in  the 
same  proportion.  On  the  other  hand,  most  of  the  mineral  products 
have  fallen  in  price.  Cotton,  which  is  produced  in  the  eastern  part 
of  the  state,  has  fallen  off  more  than  50  per  cent  since  1920,  but  is  only 
slightly  under  the  production  of  1913.  Costs  are  said  to  be  25  to  35 
per  cent,  less  for  cotton  and  are  about  back  to  the  condition  of  1913. 
The  facilities  of  the  War  Finance  Corporation  have  been  used  to  some 
extent,  especially  in  the  case  of  the  live  stock  industry. 

There  is  much  complaint  about  high  freight  rates.  On  the 
whole,  opinion  seemed  to  favor  a  high  tariff.  It  is  said  that  the  Bonus 
Bill  is  opposed.  Interest  rates  have  remained  about  the  same,  real 
estate  loans  having  increased,  if  anything.  There  seems  to  be 
considerable  expression  of  opinion  in  favor  of  the  Federal  budget 
system,  though  no  interest  is  shown  in  the  elimination  of  tax-exempt 
securities.  There  has  been  a  considerable  number  of  failures,  and 
it  is  said  that  as  far  as  the  agricultural  interests  are  concerned,  the 
future  depends  entirely  upon  the  1922  crop. 

OREGON 

Manufacturing  industries,  such  as  canning,  have  increased  since 
1913  in  Oregon,  though  the  output  is  somewhat  less  than  two  years 
ago  and  about  the  same  as  last  year.  Most  of  them  are  reported  to 
have  a  surplus  of  goods  still  on  hand.  Costs  of  production  are 
about  back  to  the  1913  level  and  considerably  less  than  two  years 
ago,  due  chiefly  to  a  decrease  in  everything  except  transportation  and 
taxation.  The  wholesale  price  of  goods  is  about  40  per  cent,  below 
the  peak,  and  retail  prices  about  25  per  cent.  In  regard  to  natural  prod¬ 
ucts,  there  is  said  to  have  been  no  material  change  in  the  quantities 
produced  in  recent  years,  though  there  has  been  a  slight  increase  over 
1913.  There  is  no  large  stock  of  fruit  on  hand,  but  a  considerable 
amount  of  canned  salmon.  From  the  southwestern  part  of  the  state 
comes  the  report  that  there  is  a  surplus  of  lumber,  especially  of  the 
lower  grades,  of  which  the  price  is  said  to  be  about  50  per  cent. 

36 


over  1920,  while  the  average  of  most  of  these  products  is  about  15 
per  cent,  less  than  1921.  Retail  prices  are  following  wholesale  prices 
reluctantly,  probably  about  10  per  cent,  over  1921  and  20  per  cent, 
over  1920. 

There  has  been  some  use  made  of  the  War  Finance  Corporation, 
especially  for  aiding  the  live  stock  industry.  There  is  much  complaint 
about  the  railroad  situation,  especially  as  in  some  parts  of  the  state 
railroads  have  been  discontinued  and  some  comparatively  large  towns 
are  almost  without  adequate  railroad  communication.  Rates  are  said 
to  be  excessive  to  such  an  extent  that  natural  resources  cannot  be 
developed  for  shipment  to  a  broad  market.  Oregon  has  passed  a 
Soldiers’  Bonus  Law  of  its  own,  and  apparently  the  sentiment  of 
the  community  is  largely  in  favor  of  a  Federal  Bonus  as  well.  There 
is  little  attention  paid  tofc  the  question  of  tax-exempt  securities  and  the 
matter  of  the  Federal  Budget.  Interest  rates  are  still  high,  but  it  is 
expected  that  they  will  be  decreased  somewhat  in  the  near  future. 
While  reports  from  different  parts  of  the  state  vary,  business  failures 
have  evidently  been  increasing  of  late,  and  more  seem  to  be  expected. 
It  is  said  that  foreign  lumber  sales  have  increased  largely,  and  this  has 
helped  relieve  the  business  situation  somewhat.  Sentiment  in  general  is 
in  favor  of  a  high  tariff. 

It  is  said  that  the  weak  foreign  exchange  market  and  the  inability 
of  foreign  nations  to  finance  their  requirements  are  factors  holding  back 
development ;  also  the  fact  that  the  Oriental  countries  have  been 
building  their  own  flour  mills,  which  is  hindering  the  further  devel¬ 
opment  of  this  industry. 


PENNSYLVANIA 

The  three  great  factors  in  Pennsylvania  are  steel,  coal  and  oil. 
In  all  these  three  the  production,  while  greater  or  almost  as  great  as 
that  of  1913,  is  now  considerably  less  than  it  was  in  1920  and  1921. 
Cost  of  production  is  still  about  65  per  cent,  above  1913,  while  prices 
have  dropped  very  much  from  the  peak  and  are  back  almost  to  the 
condition  of  1913,  due  chiefly  to  the  decrease  of  labor  and  of  materials, 
and  in  spite  of  the  fact  that  there  has  been  a  considerable  increase 
in  taxation  and  transportation.  Along  agricultural  lines  the  situation 
has  not  changed  very  much,  though  the  prices  of  beef  and  poultry, 
dairy  products,  and  wheat  and  oats  have  fallen  considerably  in 
Pennsylvania,  as  elsewhere. 

There  is  no  serious  complaint  in  Pennsylvania  about  the  railroad 
situation,  though  it  is  felt  that  rates  are  about  20  per  cent,  too  high. 
From  the  Pittsburgh  district  comes  this  interesting  statement :  “Banks 
as  investors  in  railroad  securities  want  to  see  the  roads  given  a 
chance  to  rehabilitate  themselves  and  earn  an  adequate  return  on 

37 


their  valuation.  It  is  felt  that  with  business  reviving  and  the  con¬ 
sequent  increase  in  traffic,  together  with  the  wage  scale  placed  on 
a  basis  equal  to  that  paid  in  other  lines  of  industry  the  roads  will 
function  normally.  Shippers  in  general  are  more  interested  in  rate 
reductions  than  any  other  consideration.  The  general  public’s 
attitude  is  hard  to  determine,  but  there  seems  to  be  no  sentiment  for 
Government  ownership.” 

There  is  some  opposition  to  the  Soldiers’  Bonus  Bill,  but  in 
general  sentiment  is  in  favor  of  it,  and  a  sales  tax  is  recommended  as 
a  means  for  raising  the  revenue.  There  are  no  reports  favoring  a  low 
tariff,  though  a  few  observers  speak  for  a  moderate  tariff;  in  general, 
Pennsylvania  is  for  a  high  protective  tariff.  Interest  rates  have  fallen 
1  to  B/2  per  cent,  within  the  last  two  years,  and  it  is  expected  that 
there  may  be  further  decreases.  Failures,  though  increasing  in  number, 
have  not  been  as  serious  as  some  of  the  earlier  ones,  and  it  is  ex¬ 
pected  that  the  worst  is  over.  There  seems  to  be  no  desire  in 
Pennsylvania  to  eliminate  tax-exempt  securities,  and  there  is  no  wish 
that  the  Constitution  be  amended  in  order  to  improve  the  present 
Federal  budget  system.  According  to  reports  received,  it  is  the  view 
that  adjustment  is  held  back  by  the  following  factors:  High  taxes; 
extravagant  governmental  expenses ;  high  transportation  charges ;  high 
labor  costs;  and  the  condition  of  European  finances. 

RHODE  ISLAND 

In  Rhode  Island  production  of  machinery  is  about  20  per  cent,  of 
1919,  and  perhaps  30  per  cent,  of  normal.  Textiles  have  been  falling 
off,  metal  trades  show  a  slight  increase  and  improvement,  while 
jewelry  is  between  30  and  40  per  cent,  of  normal.  The  textile  mills 
have  also  been  very  much  affected  by  continual  strikes.  There  is  some 
surplus  in  some  of  the  textile  lines,  including  cotton  goods  and  tire 
fabrics.  Reduction  of  costs  in  labor  and  raw  materials  has  resulted 
in  a  reduction  of  the  net  cost  of  manufacturing  over  last  year  and  two 
years  ago,  while  there  has  been  a  substantial  increase  in  these  costs 
over  1913.  Wholesale  prices  have  been  reduced  in  general  about 
50  per  cent,  from  the  peak;  retail  prices,  perhaps  30  to  40  per  cent. 

There  is  some  opposition  to  the  soldiers’  bonus,  but  those  favoring 
it  desire  the  money  to  be  raised  by  means  of  a  sales  tax.  There  is 
practically  no  complaint  in  Rhode  Island  about  the  railroads,  and  the 
railroad  situation  seems  to  be  regarded  with  equanimity.  The 
railroads  have  been  affected  to  some  extent  in  Rhode  Island  by  the 
increase  of  motor  trucks,  and  as  regards  passenger  service,  an  increase 
in  electric  interurban  lines.  A  high  tariff  is  favored  by  all  those 
reporting,  and  there  is  no  interest  shown  in  regard  to  tax-exempt 
securities.  Interest  rates  have  decreased  about  two  per  cent,  in 


38 


the  last  two  years,  and  it  is  expected  that  there  may  be  a  further  slight 
decrease.  There  seems  to  be  no  interest  at  all  in  the  Federal  budget 
and  amendments  to  the  Constitution  have  not  been  very  popular  in 
Rhode  Island  of  late. 

SOUTH  CAROLINA 

There  has  been  a  large  decrease  in  the  production  of  cotton,  but 
an  equivalent  increase  in  corn  and  grain.  From  the  southeastern  part 
of  the  state  comes  the  report  that  the  production  of  lumber  has  very 
largely  increased  and  is  perhaps  double  what  it  was  in  the  last  two 
years.  There  is  some  surplus  of  cotton  and  corn  on  hand  and,  at  least 
in  some  parts  of  the  state,  some  lumber.  Costs  of  production  are  said 
to  be  25  per  cent,  less  than  last  year  and  40  per  cent,  less  than  two  years 
ago,  though  the  figures  vary  considerably.  This  decrease  is  due  chiefly 
to  a  reduction  in  wages  and  in  materials,  though  transportation  has 
increased  and  money  shows  very  little  change.  Wholesale  prices  have 
decreased  in  the  case  of  cotton,  which  has  fallen  from,  roughly,  40 
cents  a  pound  to  16^2  cents,  while  lumber  has  decreased  somewhere 
from  30  to  40  per  cent.  Retail  prices  are  perhaps  25  per  cent,  lower 
than  they  were  at  the  peak.  The  facilities  of  the  War  Finance  Corpora¬ 
tion  have  been  made  use  of  in  the  western  part  of  the  state,  but  from 
the  eastern  part  comes  the  report  that  they  have  been  used  only  very 
slightly. 

While  railroad  service  is  said  to  be  good,  freight  rates  are  felt  to 
be  exorbitant,  both  for  products  shipped  out  as  well  as  for  those  shipped 
in.  According  to  the  reports,  there  is  general  opposition  to  the  Soldiers’ 
Bonus  Bill.  Sentiment  favors  a  low  tariff,  but  based  on  American 
valuation.  Sentiment  against  tax-exempt  securities  has  not  developed, 
and  there  is  no  special  interest  in  the  Federal  budget.  In  some  parts 
of  the  state,  notably  the  eastern,  borrowers  have  had  difficulty  in  obtain¬ 
ing  sufficient  credits  from  their  banks,  and  bank  rates  have  decreased 
only  very  little.  Failures  have  been  fairly  numerous  and  have  tended 
to  increase  in  recent  months.  It  is  said  that  the  greatest  need  is  “the 
gradual  restoration  of  foreign  trade  “and  if  it  could  be  accelerated  by 
the  government  in  some  way  normal  prices  would  soon  be  restored.” 

SOUTH  DAKOTA 

In  flour  and  feeds  production  is  more  than  in  1920,  due  to  the  better 
crop  of  1921.  There  has  been  more  or  less  increase  in  a  small  way  of 
manufactured  articles,  as  the  territory  has  been  developed.  Prices  have 
been  falling  since  1920,  at  the  end  of  which  year  they  reached  their 
peak,  and  the  same  is  true  of  the  retail  prices.  In  regard  to  raw 
products  1920  was  an  extremely  wet  year  and  as  a  result  there  has  been 
considerable  increase  in  the  crop  since  that  time,  especially  in  corn. 


39 


Small  grains  have  decreased  somewhat,  and  the  same  is  true  of  live 
stock.  The  only  surplus  on  hand  above  normal  is  in  the  case  of  corn. 
Taxes  and  interest  rates  are  high,  but  help  is  very  much  lower,  with 
the  result  that  costs  of  production  are  considerably  lower  than  1920 
and  1921,  though  still  50  per  cent,  higher  than  in  1913.  Besides  the 
increase  in  taxation  and  interest  rates,  transportation  has  also  increased, 
while  other  items  have  decreased.  “There  has  been  considerable  use 
of  the  facilities  of  the  War  Finance  Corporation,  but  the  fact  is  that 
with  the  great  drop  in  prices  very  few  farmers  have  been  entitled  to 
any  further  extension  of  credit  in  considerable  amounts.”  The  fall  of 
prices  for  agricultural  products  needs  no  repetition  here,  as  it  has  been 
stated  several  times,  and  South  Dakota  has  been  no  exception. 

According  to  all  reports,  the  railroads  are  adequately  serving  the 
state,  and  it  is  reported  from  the  eastern  part  of  the  state  that  “rates 
would  not  be  so  greatly  criticized  if  the  prices  for  merchandise  pur¬ 
chased  by  the  farmers  were  in  line  with  the  prices  received  for  his 
products.” 

Opinion  in  regard  to  the  Soldiers’  Bonus  Bill  is  divided,  but  as  the 
state  itself  agreed  to  pay  its  own  ex-service  men  a  bonus,  it  probably 
means  that  a  majority  would  vote  in  favor.  As  a  means  of  raising  the 
money  a  modified  sales  tax  is  suggested.  The  tariff,  according  to  most 
reports,  is  not  generally  discussed.  “The  American  valuation  plan 
seems  to  have  merits,  though  the  average  westerner  will  favor  low 
tariff,  if  it  will  bring  lower-priced  commodities.”  Such  sentiment  as 
there  is  seems  to  be  in  favor  of  a  low  tariff.  Credit  has  been  restricted 
and  money  rates  have  been  high,  being  still  around  9  per  cent,  in  most 
parts  of  the  state.  Failures  among  business  firms  have  been  decreasing, 
but  among  the  farmers  there  has  been  a  considerable  increase.  It  is 
stated  by  one  observer  that  the  earnings  of  the  banks  for  the  next  few 
years  will  be  mostly  absorbed  taking  care  of  necessary  adjustments. 
There  is  no  strong  sentiment  in  favor  of  eliminating  tax-exempt  securi¬ 
ties.  As  one  observer  states :  “We  are  in  an  agricultural  territory  which 
benefits  by  the  sale  of  state  rural  credit  bonds  and  Federal  and  bank 
bonds.”  As  far  as  there  is  any  interest  in  the  matter  of  the  Federal 
budget,  it  is  in  favor  of  the  system,  and  it  is  hoped  that  something  akin 
to  the  English  system  may  develop.  High  transportation  costs  and  high 
labor  costs  are  said  to  be  holding  back  readjustment,  but  it  is  said  that 
some  of  the  periodicals  and  monthly  letters  put  forth  by  eastern  banks 
and  business  houses  have  been  of  great  service  in  educating  the  people 
as  to  what  course  of  action  is  needed  in  the  immediate  future. 

TENNESSEE 

All  manufactured  products  have  been  much  reduced  in  quantity  in 
the  last  few  years  and  the  decrease  is  anywhere  between  15  and  40  per 

40 


cent.,  the  lowest  production  being*  in  certain  specialized  lines  of  manu¬ 
factured  lumber  and  cotton-seed  products.  Costs  of  production  are 
only  slightly  more  than  in  1913  and  considerably  less  than  in  more 
recent  years.  This  is  due  chiefly  to  a  decrease  in  the  cost  of  labor, 
materials  and  construction,  but  other  items,  such  as  transportation  and 
taxes,  have  gone  up,  while  money  has  remained  pretty  constant.  Whole¬ 
sale  prices  of  manufactured  goods  show  a  decline  of  40  to  50  per  cent, 
in  manufactured  lumber,  as  much  as  66  per  cent,  in  certain  steel 
products,  and  perhaps  20  to  25  per  cent,  in  flour.  There  is  not  much 
of  a  surplus  of  manufactured  goods,  however,  on  hand,  liquidation 
having  taken  place  in  nearly  all  lines.  In  regard  to  raw  products,  a 
surplus  of  cotton  and  lumber  is  reported,  especially  from  the  western 
part  of  the  state.  There  has  been  an  increase  of  phosphate  and  wheat, 
but  a  considerable  decrease  of  hogs,  lumber  and  cotton,  the  average  for 
agricultural  products  showing  perhaps  a  30  per  cent,  decrease  in  recent 
years.  Costs  of  production  have  declined  from  25  to  50  per  cent,  and 
the  decline  in  wholesale  prices  has  corresponded  more  or  less  to  the  cost 
of  production.  Retail  prices  have  not  followed  suit  to  the  same  extent. 
There  has  been  a  marked  use  made  of  the  facilities  of  the  War  Finance 
Corporation. 

Railroads  are  said  to  have  curtailed  expenses  as  far  as  possible  and 
at  the  same  time  maintain  an  adequate  service,  but  freight  rates  are 
considered  excessive,  and  it  has  affected  especially  the  prosperity  of 
phosphate,  fertilizer  and  agricultural  interests.  It  is  reported  that  there 
is  strong  opposition  everywhere  to  the  Soldiers’  Bonus  Bill.  Interest 
rates  are  still  high,  and  there  has  not  been  much  change,  though  it  is 
hoped  that  there  may  be  a  slight  decrease  in  the  next  few  months. 
While  failures  have  increased  slightly,  it  is  expected  that  in  most  lines 
there  will  not  be  many  more,  except  possibly  in  some  of  the  smaller 
retail  businesses.  It  is  not  felt  that  the  budget  system  has  accomplished 
very  much  for  the  Federal  government,  and  there  is  a  very  strong 
sentiment  against  tax-exempt  securities.  It  is  held  that  high  taxes,  high 
transportation  rates  and  the  foreign  situation  are  holding  back  the 
necessary  readjustment  and  more  prosperous  times. 

TEXAS 

It  is  reported  from  the  eastern  part  of  the  state  and  also  from  the 
southern  part  that  petroleum  products  have  increased  very  largely  in 
the  last  few  years,  being  as  much  as  25  per  cent,  more  than  two 
years  ago,  and  possibly  as  much  as  100  per  cent,  more  than  in  1913. 
The  result  is  that  oil  well  drilling  equipment  has  also  largely  increased. 
This  is  due  to  the  opening  of  many  new  oil  fields.  Costs  have  been 
reduced,  owing  to  the  decline  of  wages,  construction  material,  and 
interest  rates,  while  the  charges  for  transportation  and  taxation  have 


41 


been  rather  constant.  The  manufacture  of  lumber  is  also  active 
again,  and  while  the  output  is  smaller  than  in  1913,  it  is  larger  than 
in  1919.  The  same  condition  exists  in  regard  to  sugar  refining  and 
most  other  lines.  In  regard  to  raw  products,  what  has  been  said 
about  oil  refining  applies  equally  to  the  production  of  crude  oil.  Cotton, 
on  the  other  hand,  has  decreased  very  much  recently.  From  the 
central  part  of  the  state  it  is  reported  that  its  place  has  been  taken 
somewhat  by  corn,  of  which  25  per  cent,  more  was  produced  in  1921 
than  in  1920.  There  has  also  been  a  large  decrease  in  production  of 
rice  since  1913,  while  cattle,  sheep,  and  wool  show  comparatively  little 
change  in  most  parts  of  the  state.  Wholesale  prices  have  everywhere 
fallen  very  largely,  especially  for  cotton,  though  there  has  been  some 
improvement  in  recent  months.  The  facilities  of  the  War  Finance 
Corporation  have  been  used,  but  there  is  still  a  surplus  of  products  in 
the  hands  of  the  producers,  especially  cotton  and  rice.  Retail  prices, 
while  they  have  followed  the  decline  of  wholesale  prices,  have  not  fallen 
to  the  same  extent. 

Freight  rates  are  considered  excessive,  “Particularly  in  that  they 
have  not  shared  the  decline  that  has  attended  agricultural  products.” 
No  definite  proposals  in  regard  to  the  rehabilitation  of  the  railroads 
have  been  made.  “It  is  felt  that  in  Texas  the  larger  trunk  lines  could 
operate  with  a  better  profit  if  the  heads  of  railroads  would  be  more 
appreciative  of  the  need  of  incurring  the  good  will  of  the  public.” 
General  sentiment  seems  to  be  opposed  to  the  Soldiers’  Bonus  Bill, 
and  no  definite  plan  for  financing  it  has  been  considered.  Texas 
is  opposed  to  a  high  protective  tariff.  There  is  no  sentiment  in  regard  to 
a  constitutional  amendment  to  eliminate  tax-exempt  securities,  and  no 
opinions  expressed  in  regard  to  the  Federal  budget  system.  Interest 
rates  have  shown  a  slight  decrease,  and  it  is  believed  that  this  tendency 
will  continue.  Business  failures  have  been  increasing. 

It  is  stated  that  conditions  that  are  holding  back  speedy  readjust¬ 
ment  are :  “Extravagance  in  governmental  administration ;  failure 
to  recognize  that  large  sums  of  money  due  from  foreign  govern¬ 
ments  can  be  paid  only  by  permitting  these  foreign  countries  to  sell 
their  goods  and  the  product  of  their  labor  to  us,  in  payment  of  their 
debts;  an  unscientific  and  a  most  expensive  method  of  administering 
and  collecting  our  taxes;  an  unwillingness  of  so-called  trade  unions 
or  union  labor  to  assume  a  proportionate  reduction  in  costs.”  It  is 
further  pointed  out  that  “no  economic  readjustment  is  possible  unless 
the  freest  possible  commercial  intercourse  is  permitted  between  this 
country  and  foreign  countries,  especially  Europe.  Exports  of  cotton 
and  of  wheat  have  kept  up  in  fairly  good  volume,  but  the  sale  of  both 
raw  and  manufactured  goods  has  been  necessarily  restricted  by  the 
fact  that  foreign  countries  cannot  pay  for  our  goods  when  we 


42 


interpose  a  barrier,  by  way  of  an  extortionate  tariff  or  otherwise,  which 
keeps  them  from  selling  back  their  manufactured  goods  and  their 
products  in  turn.” 

UTAH 

Manufactured  products  are  said  to  have  been  reduced  about  20 
per  cent,  within  the  last  two  years,  while  as  regards  natural  products, 
coal  production  is  about  half  of  what  it  was  in  1921,  but  probably  double 
that  of  1913.  Wool,  sheep,  and  cattle  are  unchanged  in  quantity  in 
the  last  three  years,  but  probably  represent  a  40  per  cent,  reduction 
since  1913.  Copper  mining  is  said  to  have  decreased  about  8  per  cent, 
since  1913  and  15  per  cent,  since  1917.  #  Due  to  increased  acreage, 
farm  products  have  been  increasing.  The  only  surplus  seems  to  be 
hay  and  copper,  and  of  the  latter  stocks  are  being  rapidly  depleted, 
according  to  reports.  The  cost  of  mining  coal  in  1922  is  about  20 
per  cent,  higher  than  in  1917,  even  considering  the  wage  cut.  “The 
cost  of  producing  wool,  sheep,  and  cattle  is  slightly  lower  than  in  1918 
to  1921,  but  much  higher  in  the  years  previous  to  1917,  due  to  wage 
advances,  scarcity  of  range,  tax  increases,  and  rise  in  prices  of  supplies.” 
There  has  been  a  sharp  decrease  in  the  wholesale  prices  of  many  prod¬ 
ucts,  but  not  as  much  change  in  the  case  of  retail  prices.  There 
has  been  a  large  use  of  the  facilities  of  the  War  Finance  Corporation, 
both  by  the  sugar  industries  and  by  sheep  and  cattle  men. 

Railroads  are  said  to  be  in  good  condition,  though  freight  rates 
here,  as  elsewhere,  are  felt  to  be  too  high.  It  is  said  that  rates  on 
agricultural  products  ought  to  be  reduced  25  to  33  per  cent.,  on  coal,  40 
per  cent.,  and  on  other  commodities,  10  to  25  per  cent.  All  taxable, 
interests  are  said  to  be  opposed  to  the  Soldiers’  Bonus  Bill.  There 
is  a  strong  sentiment  in  favor  of  a  high  tariff  for  agricultural  products, 
especially  wool,  beef,  and  mutton.  “In  agricultural  sections  banks  are 
unable  to  handle  even  the  legitimate  demands  of  borrowers  who  have 
good  security,  but  the  situation  is  slowly,  very  slowly,  recovering.” 
As  a  result,  interest  rates  have  been  practically  unchanged  for  some 
time,  and  no  immediate  change  is  expected.  “Business  failures  have 
been  increasing,  due  principally  to  local  conditions,  aggravated  by  the 
prolonged  national  slump.”  The  Federal  budget  system,  as  far  as 
opinion  is  expressed,  is  said  to  be  popular,  but  there  is  not  much 
interest  shown  in  regard  to  the  question  of  tax-exempt  securities. 
Foreign  sales  and  foreign  conditions  are  said  to  play  practically  no 
role  in  Utah. 

VERMONT 

There  is  less  slate  and  other  similar  articles  being  produced  in 
Vermont,  and  there  is  practically  no  surplus  of  stocks  on  hand.  Costs 
of  production  have  come  down  slightly,  owing  to  a  slight  decrease  in 


43 


labor  and  materials,  though  taxation  is  higher.  Sentiment  is  in 
favor  of  a  high  tariff.  Interest  rates  have  not  varied  very  much, 
being  about  6  per  cent,  for  ordinary  loans. 

VIRGINIA 

In  most  lines  of  manufactures  there  has  been  an  increase  of 
output  during  the  year,  and  conditions  are  generally  better  than  in  1913. 
Reduction  of  output,  however,  is  reported  in  the  lumber  products.  The 
artificial  silk  mills  are  said  to  be  doing  especially  well.  Manufacturers 
generally  have  no  surplus  of  stocks  on  hand.  Costs  of  production, 
generally  speaking,  are  less^than  in  1920  and  1921,  but  anywhere  from 
35  to  50  per  cent,  higher  than  in  1913,  owing  to  the  fact  that  taxation 
and  transportation  charges  have  increased.  Wholesale  prices  of  prac¬ 
tically  all  manufactured  products  have  come  down  40  to  60  per  cent, 
from  the  peak,  while  retail  prices  have  followed  the  same  tendency, 
though  not  to  the  same  extent.  During  1921  considerably  less  tobacco, 
lumber,  and  coal  were  produced  than  in  previous  years,  but  the  output 
of  other  products  was  about  normal.  Costs  are  said  to  be  about 
twice  as  much  as  in  1913  but  only  one  half  of  what  they  were  in 
1920.  This  is  owing  chiefly  to  the  sharp  reduction  in  price  of  farm 
labor,  though  mining  labor  has  been  reduced  very  little.  Of  most 
natural  products  there  is  no  large  surplus  on  hand  except  peanuts, 
which  are  lower  in  price  than  ever  before  and  which  are  filling  the 
warehouses.  In  the  last  few  months  there  has  been  a  slight  demand  for 
peanut  oil.  The  facilities  of  the  War  Finance  Corporation  have  been 
used  chiefly  for  the  benefit  of  the  peanut  industry. 

Transportation  conditions  in  the  state  are  said  not  to  be  normal, 
as  only  four  roads  are  paying  their  way.  There  is  much  opposition 
to  the  Soldiers’  Bonus  Bill,  but  if  it  is  to  be  passed  a  sales  tax  is 
favored  as  a  means  of  raising  the  necessary  money.  Virginia  is  against 
a  high  tariff.  There  is  no  interest  displayed  in  the  question  of  tax- 
exempt  securities  and  practically  none  in  regard  to  the  Federal  budget 
system.  Interest  rates  are  said  to  have  decreased  1%  per  cent,  in  the 
last  two  years,  and  further  slight  decreases  are  expected.  In  the  past 
year  failures  have  increased  very  largely,  but  it  is  expected  that  the 
worst  is  over.  It  is  said  that  one  of  the  chief  factors  holding  back 
readjustment  is  the  situation  in  regard  to  foreign  exchange,  arid  the 
view  is  expressed  that  it  will  be  necessary  for  this  country  to  assist  in 
the  rehabilitation  of  foreign  countries  by  lending  additional  money. 

WASHINGTON 

In  the  manufacturing  industries  in  Washington  it  is  said  that  more 
clothing  is  being  produced  than  before,  and  the  same  is  true  of  dairy 
products,  canned  goods,  flour  and  condensed  milk.  On  the  other  hand, 


44 


machinery  has  fallen  off,  owing  to  the  fact  that  “During  the  war  period 
a  great  many  machine  and  foundry  shops  sprang  up  in  response  to  the 
increased  demand.  Many  of  these  are  operating  on  a  very  restricted 
basis  and  others  have  ceased  entirely.”  There  is  practically  no  surplus 
of  any  kind  on  hand,  and  the  improvement  has  been  especially  marked 
in  the  case  of  condensed  milk.  Costs  of  production  are  about  the  same 
in  this  last  year,  less  than  two  years  ago  and  30  per  cent,  higher  than 
1913.  The  latter  is  due  to  the  increased  cost  of  labor,  and  also  some¬ 
what  of  materials.  On  the  whole,  wholesale  prices  are  25  per  cent, 
lower  than  they  were  at  the  peak,  and  retail  prices  have  also  come 
down  considerably.  In  regard  to  raw  products,  “Lumber  production  has 
increased  during  the  past  two  years.  It  has  also  increased  since  1913.” 
Salmon,  on  the  other  hand,  has  decreased  substantially  during  the  last 
two  years.  Fruit  and  agricultural  products  have  increased,  and  there 
has  been  an  increase  also  in  the  production  of  seeds.  There  is  a  surplus 
of  berries  on  hand,  but  not  of  other  products.  The  wholesale  price  of 
lumber  is  lower  than  two  years  ago,  but  slightly  higher  than  last  year, 
and  salmon  in  general  has  decreased. 

The  railroad  situation  is  satisfactory,  but  it  is  felt  “That  there  is 
a  decided  discrepancy  in  the  costs  of  various  classes  of  labor,  particu¬ 
larly  as  applied  to  the  railroad  brotherhoods.  It  is  emphatically  believed 
that  as  rates  are  reduced  there  will  be  a  revival  of  the  lumber  industry 
in  this  section  (Seattle),  which  in  turn  will  affect  the  business  com¬ 
munity  at  large.”  There  is  much  opposition  to  the  Soldiers’  Bonus 
Bill,  but  in  so  far  as  it  is  favored  it  is  hoped  that  a  sales  tax  will  be 
used  to  raise  the  money.  “The  general  sentiment  is  in  favor  of  a  tariff, 
but  opposed  to  the  principle  of  American  valuation.”  The  sentiment 
is  gaining  steadily  in  favor  of  a  constitutional  amendment  to  eliminate 
tax-exempt  securities.  Money  has  been  easy  and  there  has  been  a  slight 
decrease  of  interest  rates,  and  it  is  expected  that  the  course  in  the 
coming  year  will  follow  the  lowering  of  the  eastern  rates.  While 
failures  increased  in  January,  they  have  been  decreasing  of  late,  and 
it  is  not  believed  that  there  will  be  an  unusually  large  number  during 
the  rest  of  this  year.  There  is  apparently  little  interest  in  the  question 
of  the  Federal  budget. 

It  is  felt  that  the  conditions  holding  back  speedy  readjustment  are 
high  labor  wages,  especially  of  railroad  employees,  which  causes  exces¬ 
sive  freight  rates ;  then,  also,  the  instability  of  foreign  exchange  is 
blamed,  high  taxation  and  unsettled  European  conditions.  Exports  have 
increased  in  the  last  six  months,  due  to  more  favorable  exchange  condi¬ 
tions  and  increasing  demand  for  lumber  in  Japan. 


45 


WEST  VIRGINIA 


In  the  coal  industry  production  was  slightly  larger  than  last  year, 
but  only  about  25  per  cent,  of  what  it  was  two  years  ago  and  very  much 
less  than  in  1913.  The  production  has  been  materially  curtailed  this 
year,  as  there  has  been  no  market,  and  since  the  first  of  April  the  mines 
have  all  been  closed  down  on  account  of  the  strike.  Lumber  also  is  not 
being  as  extensively  manufactured  as  it  was  two  years  ago  and  in  1913. 
The  result  is  that  lumber  manufacturers  are  trying  to  get  rid  of  their 
surplus  supplies,  and  hence  there  is  an  over-supply  of  rough  lumber  on 
hand.  Glass  works  have  more  business  booked  than  for  several  years 
past.  Tin  plate  works  are  running  full  capacity,  zinc  smelters  about  50 
per  cent,  of  capacity  and  china  and  tableware  about  80  per  cent.  Costs 
of  production  show  a  considerable  reduction  in  the  last  few  years,  and 
in  regard  to  coal,  costs  are  said  to  be  only  slightly  higher  than  in  1913. 
Such  figures  as  are  given  seem  to  indicate  that  costs  are  25  per  cent, 
less  than  in  1920  and  1921.  Wholesale  prices  have  decreased.  The 
price  of  bituminous  coal  has  declined  as  much  as  100  per  cent,  in  the 
past  twelve  months,  and  it  is  said  that  it  is  being  sold  for  less  than  the 
cost  of  production.  This  is  also  due  partly  to  high  freight  rates,  which 
according  to  opinions  expressed  ought  to  be  reduced  about  30  per  cent. 

It  is  said  that  the  state  does  not  desire  a  bonus  bill  until  economic 
conditions  improve.  Rates  have  remained  pretty  constant  in  West 
Virginia,  according  to  the  information  obtained.  The  total  number  of 
failures  has  not  been  large,  but  it  is  feared  that  if  the  coal  strike  con¬ 
tinues  a  long  time  there  will  be  a  number  of  serious  ones.  The  opinion 
is  expressed  that  “There  is  a  feeling  that  the  prosperity  of  the  country 
is  entirely  dependent  upon  the  reduction  of  labor  to  a  living  wage  and  a 
large  reduction  in  freight  rates.  Certain  parts  of  West  Virginia  are 
almost  entirely  dependent  upon  the  prosperity  of  the  coal  business,  and 
unless  there  is  a  change  in  the  condition  of  union  labor  there  cannot 
be  prosperity  in  the  union  coal  fields.”  In  parts  of  the  state  not 
dependent  upon  the  coal  industry  the  view  is  expressed  that  a  stabiliza¬ 
tion  of  foreign  exchange  and  foreign  conditions  must  precede  any  per¬ 
manent  improvement. 

WISCONSIN 

Manufacturing  industries  in  Wisconsin  show  an  excess  of  pro¬ 
duction  over  1913  in  nearly  all  lines,  especially  in  the  automobile 
and  accessories  business,  which  was  in  its  infancy  in  1913.  Farm 
machinery  is  an  exception  to  the  general  situation,  the  production  being 
perhaps  only  50  per  cent,  of  what  it  was  in  1913.  In  comparison  with 
two  years  ago  production  in  all  lines  is  perhaps  20  to  40  per  cent, 
less.  Production  costs  are  less  than  in  1920  and  1921,  but  from  50 
to  150  per  cent,  above  those  of  1913.  The  various  items  that  enter 

46 


into  the  cost  of  production,  such  as  labor,  materials,  capital,  and  con¬ 
struction,  are  less,  while  taxation  is  higher  and  transportation  shows 
little  change  in  recent  years.  There  has  been  a  decided  drop  in  whole¬ 
sale  prices  of  practically  all  manufactured  goods :  autos  and  accessories, 
20  to  30  per  cent.;  farm  and  heavy  machinery,  15  to  35  per  cent.; 
knit  goods  and  work  clothing,  20  to  40  per  cent.;  shoes,  15  to  30  per 
cent.  As  regards  the  manufacture  of  paper,  which  constitutes  an 
important  product  of  the  south  central  part  of  Wisconsin,  production  in 
1921  was  about  25  per  cent,  less  than  in  1920,  but  perhaps  100  per  cent, 
more  than  in  1913,  and  its  wholesale  price  has  decreased  perhaps  60  per 
cent,  from  peak.  In  no  lines  is  there  said  to  be  much  surplus  in  the 
hands  of  manufacturers. 

As  regards  natural  products,  wood  products  are  materially  less 
than  either  last  year,  two  years  ago,  or  1913,  while  in  agricultural 
products  there  has  not  been  very  much  change,  on  the  whole.  Wis¬ 
consin  is  especially  important  for  its  dairy  products,  and  these  have 
at  all  times  a  rather  steady  market ;  if  anything,  there  has  been  an 
increase  in  these  products  since  1913.  From  the  southern  part  of 
the  state  it  is  reported  that  “Labor  is  down,  cost  of  production  has 
declined  one-third.  As  the  boom  did  not  hit  farm  lands,  here  as  in 
Iowa,  Wisconsin  farmers  are  in  an  easier  financial  situation  than 
elsewhere ;  they  do  not  have  to  pay  interest  “And  principal  on  inflated 
values/’  In  general,  the  1921  crops  total  much  more  in  bulk  and 
value  than  in  1913.  There  has  been  a  surplus  of  corn  and  feed  in 
some  regions  of  Wisconsin,  but  the  surplus  of  hogs  is  being  marketed 
rapidly.  Very  little  wool  or  wheat  is  carried  over.  Farm  products, 
as  elsewhere,  are  substantially  lower  in  price  than  one  or  two  years 
ago,  but  most  of  those  in  Wisconsin  are  above  the  prices  prevailing 
in  1913.  Retail  prices  have  followed  the  same  trend  as  wholesale 

prices.  The  cost  of  cheese  production  is  much  less  on  account  of 

falling  prices  of  feed,  and  pack  of  peas,  the  principal  Wisconsin 
canned  product,  will  also  be  materially  lower  this  year  than  in  recent 
years. 

It  is  felt  that  transportation  facilities  are  adequate  for  present 
needs,  but  there  is  a  strongly  expressed  desire  for  the  Great  Lakes- 
St.  Lawrence  Waterway,  and  it  is  hoped  that  freight  rates  will  be 
reduced  especially  on  coal,  ore,  iron  and  steel  products,  building 
materials,  and  lumber.  It  is  felt  that  the  railroads  are  having  to  pay 
too  much  for  their  labor,  and  a  reduction  of  rates  on  basic  commodities 

would  place  the  roads  on  a  sounder  basis.  Much  opposition  is 

expressed  to  the  Soldiers’  Bonus  Bill.  There  is  considerable  senti¬ 
ment  for  the  American  Valuation  Plan,  and  in  general,  a  protective 
tariff  seems  to  be  favored.  Interest  rates  have  decreased  1  y2  to  2 
per  cent.,  and  it  is  believed  that  the  decrease  will  continue  for  this 

47 


year.  Opinion  in  regard  to  tax-exempt  securities  seems  to  be  divided. 
There  is  little  interest  in  the  Federal  budget  system.  Money  on  the 
whole  has  been  easier  of  late,  and  it  is  not  expected  that  there  will  be 
an  unusually  large  number  of  failures.  It  is  felt  that  the  conditions 
retarding  ipeecfy  ’rekdjustment  are  high  freight  rates,  high  cost  of 
labor,  and  high  qo$t  of  coal. 


WYOMING 

In  Wyoming  there  is  said  to  be  considerably  less  cattle  and  sheep, 
perhaps  as  much  as  25  to  60  per  cent,  less  than  in  recent  years,  the 
decrease  varying  in  different  parts  of  the  state.  This  is  partly  due  to 
natural  conditions  and  partly  to  shortage  of  funds  to  finance  the 
industry.  Coal  increased  between  1913  and  1920  24.83  per  cent., 
but  the  latter  marked  the  maximum  and  since  then  there  has  been  a 
considerable  decline.  There  has  been  a  reduction  in  costs  of  pro¬ 
duction,  notably  in  cattle  and  sheep  raising,  but  the  other  items  that 
enter  into  cost  have  remained  practically  stationary  in  price,  except 
taxation,  which  has  increased.  Wholesale  prices  are  considerably 
lower  than  they  were  a  year  or  two  ago  and  in  some  instances  are 
as  low  as  prices  for  1913.  It  is  said  that  the  War  Finance  Corporation 
has  made  large  loans,  practically  all  through  the  Wyoming  Stockmen’s 
Loan  Company. 

Railroad  service  is  on  the  whole  said  to  be  satisfactory,  but  the 
rates  are  much  higher  than  in  1916,  and  for  some  products,  such  as 
hay,  notably,  the  rate  to  market  is  prohibitive.  The  rates  on  in¬ 
coming  freight,  particularly  on  salt  and  grain  used  by  the  stockmen, 
are  excessive,  and  rates  on  coal  for  fuel  are  also  very  high  for  short 
hauls.  This  situation  is  especially  felt,  as  these  freight  rates  bear 
no  relation  whatsoever  to  the  proceeds  realized  from  live  stock  sales 
at  market.  Opposition  is  generally  expressed  to  the  Soldiers’  Bonus 
Bill.  There  is  much  sentiment  in  favor  of  a  high  tariff  and  of  the 
American  Valuation  Plan.  Opposition  is  expressed  to  tax-exempt 
securities,  and  it  is  hoped  that  some  action  will  be  taken  to  prevent 
their  increase.  Business  failures,  on  the  whole,  have  been  few,  except 
in  the  case  of  the  live  stock  industry,  and  even  there  it  is  believed  that 
the  situation  is  about  cleaned  up.  As  factors  retarding  readjustment, 
high  railroad  rates,  profiteering  on  the  part  of  the  retailers,  and  the 
income  tax  law  are  mentioned.  It  is  said  that  there  is  no  inducement 
whatsoever  under  the  present  income  tax  law  to  invest  in  anything 
except  tax-free  bonds.  #  __  .. .. 


CfOT  6  1923 


48 


